April 13, 2012
CALGARY — Calgary’s housing market picked up steam in March as MLS sales surged compared with a year ago — led by stunning growth in the single-family category.
According to the Calgary Real Estate Board, total residential MLS sales in the city for the month was 2,167, up 12.63 per cent from March 2011. Also, the average MLS sale price increased by 3.69 per cent to $422,256.
In the single-family market, sales soared to 1,576, up 17.26 per cent from a year ago while the average sale price jumped by 2.36 per cent to $472,464 — that’s the highest it’s been since June 2011 when it was $479,580.
Christina Hagerty, a realtor with RE/MAX Realty Professionals in Calgary, said the market has been extremely active recently.
“Calgary seems to present the land of opportunity right now and people need homes. Renting does not seem like a reasonable option with the low interest rates. They also feel that the property values will be increasing so they want to secure an investment here,” said Hagerty.
She said employment and net migration growth in the city have boosted the real estate market. Also, a mild winter effected buyers with more of them starting to look in the market earlier in the year.
Industry officials have cited low mortgage rates as a reason for the surge in market activity in the city.
In March in Calgary, the condo apartment market saw year-over-year sales increase by 7.23 per cent to 356 while the average sale price rose by 4.56 per cent to $271,724.
The condo townhouse category experienced a year-over-year sales decline of 5.24 per cent to 235 but the average sale price increased by 1.21 per cent to $313,581.
Doug Koop, broker/owner of RE/MAX Realty Professionals in Calgary, said the market is very active due to a number of reasons.
In-migration into Calgary is a factor, creating a pool of new buyers.
“We’re expecting 20,000 new jobs in Calgary,” he said.
Other factors include low interest rates, increasing consumer confidence, a housing market that is considered very affordable, and “our average wage is higher than most other major cities,” said Koop.
Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said a number of factors are contributing to the sales activity in the resale market.
“Some prospective buyers are taking advantage of the favourable mortgage rates that are being offered while some other buyers, who have been on the fence, have started to move ahead with their buying decision,” he said. “A number of people have been benefiting from the economic growth in Calgary and this has put many of them in a position to buy a home.
“Sales in Calgary are forecast to rise above 2011 levels. With activity in the energy sector expected to continue moving forward, growth in employment, income and migration will support demand for housing.”
He said some price pressures are returning to the market as demand picks up and active listings trend lower but the CMHC is forecasting a modest increase in prices in 2012 and 2013.
“The rise in activity is related to the continued improvement of our economy and consumer confidence, as some concerns regarding the global economy have eased,” said Ann-Marie Lurie, CREB’s chief economist.
CREB said its benchmark price for its Home Price Index, reached $433,500 for single-family homes, up 4.53 per cent compared with last year.
The condominium apartment and townhouse benchmark prices for March were $247,800 and $293,600, respectively. While the apartment index price has remained relatively stable compared to last year with an increase of 1.39 per cent, the condominium townhouse index recorded an improvement of 4.34 per cent over last year, said the board.
CREB says its new home price index measures how typical properties are valued in the market rather than relying on average and median prices.
It is calculated using a statistical model that estimates prices based on several factors.
“The single-family market continues to lead the housing growth in both sales activity and pricing, and the condominium market appears to have turned the corner as well,” said Bob Jablonski, CREB’s president. “Overall, the Calgary real estate market continues to move in the right direction, with all indicators pointing towards stable growth and a move towards typical levels of activity.”
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