Modest rise predicted in Calgary home prices
Investing In Real Estate; Monthly numbers up one per cent
By Mario Toneguzzi, Calgary Herald
December 21, 2010
Short-term year-over-year house price growth in Calgary is expected to be in the range of five to seven per cent, says the Conference Board of Canada.
In its Metro Resale Index released Monday, the board said the average MLS sale price in the city in November was $397,239, up one per cent from October.
Also, on a seasonally adjusted annual basis MLS sales in November increased by 8.6 per cent from October to 21,017.
Realtor Christina Hagerty, with Re/Max Realty Professionals in Calgary, said at the beginning of this year when first-time buyers were entering into the market, industry experts felt a ripple effect was bound to happen.
That led to a surge of sales in the $400,000-$500,000 range which allowed for a third quarter spike in the luxury market as well.
"We are seeing two predominant clientele out there right now," said Hagerty of her inner-city clients.
These are "first-time buyers, which after calculations prefer to own instead of rent as it's either cheaper or similar monthly payments; (and) savvy investors who know that some people are still hesitating or unable to enter into the real estate market and are buying properties to rent."
Hagerty recently sold a 2,239-square-foot penthouse condo in the Arriva highrise in Victoria Park for $1.125 million. She has another 2,799-square-foot penthouse condo in the tower listed for sale at $1.899 million.
Hagerty said the local real estate market is buoyed by move-up buyers as well as investors, not speculators, who are buying properties for long-term hold investments.
"People are confident they have their jobs in Calgary and know they are here for at least a few years," she said.
"They are making decisions based on this -- moving their families, starting the kids in schools. They aren't maxing out their mortgage approvals. With the low interest rates, people are taking advantage, but aren't using every last dollar they are approved for. They are leaving a little for a rainy day."
The conference board forecast the following Canadian centres to experience seven per cent and higher short-term year-over-year price growth: Saskatoon, Gatineau, Montreal, Quebec, Sherbrooke, Trois-Rivieres and Saguenay.
Joining Calgary in the five to seven per cent range were Victoria, Vancouver, the Fraser Valley, Regina, Winnipeg, Halifax and Newfoundland.
Despite the optimistic outlook, in Calgary seasonally-adjusted sales in November were down from the 27,816 recorded in November 2009 and the average price was just slightly off the $400,865 from a year ago.
In November, there were 891 single-family home sales in Calgary for an average price of $455,460. In October, there were 888 transactions at an average of $444,744.
In the condo market, Calgary saw 310 MLS transactions in November, the same as in October, for an average sale price of $284,667. That was down from the average of $287,793 in October.
The conference board said the sales-to-new listings ratio in Calgary was 0.521 in November, increasing from 0.494 the previous month. A year ago, it was 0.653. It classified Calgary as currently being a sellers' market.
On a seasonally-adjusted annual basis, listings for Calgary were 41,929 in November, up from 39,406 in October but down from 44,500 a year ago.
