Calgary Area Real Estate Newsletter
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September, 2014

In this issue:

Calgary Real Estate Board Update

Condominium sales set a new record for August activity

Sales activity improves for condominium product, while declining in the single-family sector

Graph of City of Calgary August 2014 Sales - Apartments, Townhouses, Single Family Homes

Calgary, September 2, 2014 – Strong gains in Calgary’s condominium apartment and townhouse sectors sparked a 3.4 per cent year-over-year growth in residential resale housing sales activity for August.

A total of 2,267 units exchanged hands in the city during the month, compared to 2,192 during the same period in 2013. The condominium apartment and townhouse sectors saw the biggest gains, increasing by nearly 14 and 20 per cent, respectively, for total monthly sales of 790 units.

“The record pace of August sales in the condominium sector is related to the relative affordability of this product combined with a tight rental market and low lending rates,” said CREB®® chief economist Ann-Marie Lurie, noting most of the activity continues to take place in lower price ranges. “More than 76 per cent of condominium new listings are priced below $400,000 and represent more than 68 per cent of the total inventory within city limits.”

So far this year, condominium apartment and townhouse sales have totaled a respective 3,388 and 2,685 units. This represents a combined increase of nearly 20 per cent.

“Over the past three months apartment-style new listings haveincreased by more than 40 per cent year over year, pushing up overall inventory levels and moving this market toward balanced territory despite the strong sales growth,” said Lurie.

Meanwhile, year-over-year single-family sales declined by 2.4 per cent in August to 1,477 units, partly due to limited availability in lower price ranges. Despite the pullback, activity in the sector remains stronger than long-term averages.

“The decline in single-family sales is mostly due to the shrinking supply in the under-$400,000 sector,” said CREB®® president Bill Calgary, September 2, 2014 – Strong gains in Calgary’s condominium apartment and townhouse sectors sparked a 3.4per cent year-over-year growth in residential resale housing sales activity for August.

A total of 2,267 units exchanged hands in the city during the month, compared to 2,192 during the same period in 2013. The condominium apartment and townhouse sectors saw the biggest gains, increasing by nearly 14 and 20 per cent, respectively, for total monthly sales of 790 units.

“The record pace of August sales in the condominium sector is related to the relative affordability of this product combined with a tight rental market and low lending rates,” said CREB®® chief economist Ann-Marie Lurie, noting most of the activity continues to take place in lower price ranges. “More than 76 per cent of condominium new listings are priced below $400,000 and represent more than 68 per cent of the total inventory within city limits.”

So far this year, condominium apartment and townhouse sales have totaled a respective 3,388 and 2,685 units. This represents a combined increase of nearly 20 per cent.

“Over the past three months apartment-style new listings haveincreased by more than 40 per cent year over year, pushing up overall inventory levels and moving this market toward balanced territory despite the strong sales growth,” said Lurie.

Meanwhile, year-over-year single-family sales declined by 2.4 per cent in August to 1,477 units, partly due to limited availability in lower price ranges. Despite the pullback, activity in the sector remains stronger than long-term averages.

“The decline in single-family sales is mostly due to the shrinking supply in the under-$400,000 sector,” said CREB®® president Bill

[Click here to read the full PDF report]

Calgary’s energy boom is fuelling record surge in luxury home sales

From The Financial Post

Larry Lindholm made his fortune in Calgary’s booming energy industry, building and selling an oilfield equipment company. Then he bought a $10.4 million mansion.

“This is the big reward,” Lindholm, 52, said from the new home he shares with wife, Kristi, 35, and their four kids. “Calgary’s a neat city to be part of, the opportunities are here right now. It’s amazing how it’s grown, with all the development taking place in the oil and gas sectors.”

The energy patch in Calgary, nicknamed “Cowtown” for its annual rodeo, and low mortgage rates are transforming Canada’s fourth largest city into a hub of luxury housing. Neighborhoods named Tuxedo Park and Hamptons are expanding as energy industry executives from Canada, the U.S. and Europe fuel record sales of Calgary’s most expensive homes.

Lindholm’s 14,500 square-foot (1,347 square-metre) estate, which features an eight-foot Swarovski crystal chandelier, broke the record for the most expensive home sold in Calgary when he bought it last year. That mark was topped by a $11.1 million sale later that year, which in turn may be shattered by a current listing of a $37.9 million home once owned by Henry Ford’s family.

“Luxury demand is growing,” said Corinne Poffenroth, an agent for New York-based auctioneer Sotheby’s, who represented the Lindholms in their home purchase. “Our energy sector is very strong and it attracts top-ranking executives across the country and the world. There’s a lot of young new money.”

Helicopter Tours

While Vancouver and Toronto, Canada’s financial capital, boast the country’s most expensive housing, sales of luxury homes in Calgary are surging. REALTOR®s in the city, known for sprawling suburbs and the tallest office tower in western Canada, sold 404 homes priced above $1 million in the year to June 13. That’s an all-time high for Calgary and more than 10 times the total for an entire year a decade ago, according to Calgary Real Estate Board data.

The jump in sales has been powered by oil, the most important commodity in the western province. Investment in Alberta’s oil sands may reach a peak this year of more than $30 billion, according to investment bank Peters & Co. That’s generating high-paying jobs in Calgary, Alberta’s biggest city, whose population expanded to 1.2 million last year...[read more]

CMHC Releases 2014 Second Quarter Results

From CMHC

OTTAWA, August 29, 2014 – Canada Mortgage and Housing Corporation (CMHC) reported today that net income for the six month period ended June 30, 2014 was $841 million, up 2.1% ($17 million) from the same period last year. The increase is mainly attributable to higher earnings from investments and lower insurance claims losses, both a result of improved economic conditions.

At the end of the second quarter of 2014, our total insurance-in-force was down $6 billion from December 31, 2013, standing at $551 billion. We expect insurance-in-force to decline to approximately $545 billion by year-end as mortgage repayments continue to offset new insurance written.

As a result of lower portfolio insurance volumes, our total insured volumes ($) for the first six months of 2014 were approximately 13.3% lower when compared to the same period in 2013.

For transactional homeowner loans, the average credit score for loans insured in the six month period ended June 30, 2014, was 745 while the average gross debt service (GDS) ratio for the same period of time was 25.7%. The high average credit score and average GDS ratio demonstrates a strong ability among homebuyers with CMHC-insured mortgages to manage their debts.

The strength of our mortgage insurance portfolio is further demonstrated by the overall arrears rate of 0.33% at June 30, 2014, which is a slight decrease from 0.35% registered at the end of the previous quarter. Our arrears rates have remained stable over the past several years.

Our guarantees-in-force totalled $402 billion as at June 30, 2014, a $4 billion increase from year-end 2013. For the first six months of 2014, we granted a total of $46.9 billion in new guarantees.

We work closely with provinces, territories and housing providers, including First Nations, to help low-income Canadians access affordable, better quality housing off- and on-reserve. For the six month period ended June 30, 2014, we provided nearly $1.08 billion for housing programs on behalf of the Government of Canada. These investments are provided under various housing programs and initiatives on and off reserve and help reduce the number of Canadians in housing need.

We continue to promote enhanced disclosure by publishing a range of statistics and data on our mortgage insurance business. Our Mortgage Loan Insurance Business Supplement provides meaningful insight into our mortgage insurance operations and provides market participants with data to allow them to better analyze our activities in the Canadian housing market.

As Canada’s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable housing solutions that will continue to create vibrant and healthy communities and cities across the country.

A copy of the Quarterly Financial Report and Mortgage Loan Insurance Business Supplement are available on the CMHC website

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