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Calgary Real Estate nearing seller’s market, says report – CBC News

April 3rd, 2014 by bradylayton

Real estate is approaching a seller’s market in Calgary, according to a new report on the potential of a national housing bubble.
The Conference Board of Canada report concludes that while Canadian housing prices may be headed for a modest decline in some markets, there is no bubble to pop.

“Calgary’s resale market is approaching sellers’ conditions. Sales have not fallen on a year-over-year basis since April 2011, and price growth accelerated sharply last year,” according to the report.

Calgary’s population growing

People are moving to Calgary — 43,000 last year alone — as Alberta becomes the province of choice for job seekers from the rest of Canada.

“It’s absolutely a double-edged sword,” said Calgary Mayor Naheed Nenshi. “Those people who move here don’t bring schools and hospitals and roads with them. And from a city’s perspective, they also don’t bring buses and C-Trains or parks.”

He’s stressing responsible growth and smart budgeting to make the most of the positives — a city with lots of work and a young population.

Healthy economy

ATB Financial economist Todd Hirsch agrees, saying Calgary’s experiencing a healthy rate of growth.

“In this province we are never too far away from a boom and bust mentality, and we are an energy dependant province, there’s no question about that. But I would say that in 2014, there’s more diversity within the energy sector itself,” he said.

“We’re still on kind of a roller coaster, but I’d call it more of a kiddie roller-coaster, there are still going to be ups and downs with energy price fluctuations, but I’m not looking for anything wildly dramatic.”

Memories of 2006

Calgary real estate agent Lucas Ramage says “sold” signs are going up fast.

“They’re going quick, they’re going close to list price, and again it’s getting to that type of a situation where people are needing to potentially compromise of having any kind of conditions,” he said.

“It’s getting back towards where, in ‘06, when things were getting really hot.”

Housing prices skyrocketed in 2006 with an average residential property jumping 38 per cent in Calgary over the year.

Real Estate a very hot commodity in Calgary

April 3rd, 2014 by bradylayton

Michael Franklin, CTV Calgary
Published Friday, March 21, 2014 7:42AM MDT

The condo market is heating up in the City of Calgary and buyers are learning quickly they need to act fast to buy what they want.

Brenna Hebert has been looking for a condo for a long time and has just conditionally bought one in a downtown complex.

Hebert hopes the deal closes because she missed out on several others.

Real estate Realtors say that while the market in Calgary hasn’t reached the frenzy it has in 2005 or 2007, they’re seeing a lot of the signs that show we could be headed for another boom.

“When I started, I was taking my time and looking around,” she says. “Then those properties would go quickly so I ended up having to change my strategy in this market right now.”

The Calgary Real Estate Board says that buyers looking to break into the market by purchasing starter homes for less than $400,000 are having a hard time.

“So we started to see last year really that demand was far greater than the new supply we were seeing come online,” says Ann-Marie Lure, economist with CREB. “It really depleted the inventory on the resale market.”

Pedro Villamar, Herbert’s real estate agent, says the market in Calgary is very hot, and every neighbourhood and price bracket is feeling the crunch.

“Right now, we’re seeing about a 20 percent decrease in the average days a home is on the market, we’re seeing about a 12 percent increase in sales, and an 18.5 percent decrease in active listings.”

He says the market has been building steam for more than a year and while it hasn’t reached the boom levels of 2005 or 2007, it could hit that point sometime.

“We’re seeing things we haven’t seen since the last boom,” Villamar says. “Multiple offers, homes going in one day, homes going over price by thousands of dollars.”

He adds that inner city properties are the most sought after, with vacant lots being at the top the list.

The hottest neighbourhood is Altadore, with a vacant spot listed for almost $1.4M when, two years ago, it would have gone for $1.2M.

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Calgary real estate home average prices to baloon to more than half a million dollars

November 21st, 2013 by bradylayton

CALGARY – The average price for a resale home in Calgary will balloon to more than half a million dollars by 2017, according to a new real estate report released Tuesday.

The Conference Board of Canada’s Autumn Metropolitan Housing Outlook, commissioned by Genworth Canada, said the average price for all residential property in Calgary will grow from $431,760 this year to $517,016 in 2017.

“Calgary is facing a lack of inventory in particular areas,” said Tanya Eklund, a realtor with RE/MAX Real Estate (Central) in Calgary.

“Buyers looking for land for redevelopment and homes for renovation have been in very short supply and have driven up pricing due to multiple offers and low inventory. Low interest rates, strong unemployment rates, low vacancy rates and an overall strong economy have also added to strength in the Calgary market.”

Ben Brunnen, an economic consultant in Calgary, said the city’s population has grown each year for the past four years and this has helped drive residential construction activity and home prices.

“Net-migration can have a big impact on the housing market, as an influx of people and families into our city can often increase housing demand unpredictably,” he said.

“In the current market, vacancy rates are low, rents are high and population growth is strong. Combined with a good economy and favourable job prospects, people are more willing to buy than they were a few years ago. The last time we’ve seen comparable population growth was from 2004 to 2006, when the economy entered a boom. While we won’t see similar house price appreciations due to different global economics at play, Calgary house prices should stay strong for the near future.”

Calgary’s economy and housing demand continue to thrive as energy sector activity remains healthy. Rising GDP is spurring employment growth,” said the report.

“On the resale housing market front, solid sales will lead to sound price gains this year and next. The new housing market is benefitting from strong absorptions, which are trimming unsold stocks of new units and fostering new construction. The medium term also looks decent.

“Ongoing economic growth will continue to produce gains in resale sales and prices and keep housing starts above their 20-year average. Good housing affordability, measured against local incomes, is an ongoing benefit to this market and allows single-family starts to maintain a high market share compared with other cities covered in this report.”

The report said summertime flooding in Calgary will limit Calgary’s GDP to 3.3 per cent growth in 2013, modest by recent standards. Output will rise a slightly faster 3.4 per cent in 2014, spurred by government-funded rebuilding efforts.

The job market will continue to expand, with annual growth of 2.4 per cent this year and 2.8 per cent in 2014 cutting the unemployment rate from 4.9 per cent this year to 4.6 per cent in 2014. Economic health should continue between 2015 and 2017, with GDP expanding roughly three per cent and employment rising about two per cent each year, it said.
“Calgary’s strong economic fundamentals allowed its resale market to largely shrug off the floods. Seasonally-adjusted sales and the average resale price actually rose during June, the flood month, and have subsequently advanced,” said the report.

“Price growth is accelerating, although increases remain far below boom-era advances. We expect the market to remain balanced and price growth to stay healthy in 2014 and over the following few years.”

The report’s forecast for average prices over the next few years and annual growth rate are: 2013, $431,760, 4.7 per cent; 2014, $451,798, 4.6 per cent; 2015, $473,470, 4.8 per cent; 2016, $497,139, 5.0 per cent; and 2017, $517,016, 4.0 per cent.

Forecast for sales in the resale market for the next few years and annual growth rate are: 2013, 28,111, 5.5 per cent; 2014, 28,793, 2.4 per cent; 2015, 29,418, 2.2 per cent; 2016, 30,027, 2.1 per cent; and 2017, 30,620, 2.0 per cent.

“Unsurprisingly, Calgary’s resale prices are rising briskly. Year-over-year growth has averaged a solid 4.6 per cent in the latest four quarters, including a first quarter jump near eight per cent,” said the report. “These increases will lift Calgary’s average price 4.7 per cent in 2013, the largest gain since 2007 and finally exceeding that year’s peak value. Similar price growth is expected between 2014 and 2016, with a slight tapering in growth to four per cent in 2017.

“These increases will slightly erode local housing affordability. Principle and interest charges on Calgary’s average resale home were under 16 per cent of average household income the last two years and are expected to remain there in 2013. But house prices will rise faster than incomes, pushing the ratio to roughly 20 per cent by 2017. This remains decent, as affordability is better only in Edmonton, Ottawa, and Winnipeg among the cities in this report.”

The report said buoyant housing demand is also energizing the new home market. Absorption of new units averaged 11,200 units in the four quarters to the second quarter of 2013, up 25 per cent from a year earlier. This included a surge to an annualized 15,000 units in the second quarter, the most since 2008. This strength will lift absorptions to a full-year total of 12,140 units in 2013, up 25 per cent from 2012. Another increase of nearly six per cent in absorptions is expected for 2014, but still trailing the peak of 13,700 units reached in 2008.

“Healthy new-unit take-up fuelled a big jump in housing starts to 13,186 units in 2012, more than double the recessionary trough in 2009, but well off peak levels of the last decade,” it said. “We expect starts to ease a modest 2.7 per cent in 2013 as an 11 per cent dip in multiple starts slightly outweighs a seven per cent gain in single-detached starts. For 2014, rebounding multiple starts will fuel a five per cent increase in total starts despite relatively unchanged single-detached construction.

“In the medium term, we expect housing starts to ease slightly, as both single-family and multiple construction dip. By 2017, we expect 11,400 units to get under way; this would slightly outpace the 20-year average of housing starts. While multiple starts are expected to increase their market share, they are forecast to make up only 52 per cent of total starts between 2013 and 2017.”

Record month for real estate as floods change market dynamics

July 2nd, 2013 by bradylayton

CALGARY — It appears June was another record month for Calgary’s resale housing market.

Preliminary data from the Calgary Real Estate Board’s website indicates average MLS sale prices for both the overall market in the city as well as for single-family homes were the highest ever.

The overall MLS average sale price in the city reached $466,458, up 5.6 per cent from last year, eclipsing the previous mark of $462,076, which was set in May.

In June, the single-family home average price hit $527,161, up 7.7 per cent from last year, and bettering the May’s record of $521,887.

Calgary realtor Rachelle Starnes said the past week of flooding has changed the market dramatically.

“We have seen in the past week properties sell, sight unseen, for families that have lost their homes in the flooding,” said Starnes, who is with Royal LePage Foothills. “It is shifting into a sellers’ market where buyers must buy immediately when a property enters the market or risk losing it to competing offers if they wait. The rental market is becoming non-existent so the families must purchase an alternative.

“There is limited overall supply and therefore pure Keynesian economics say prices must increase with low inventory … We have seen zero showings on luxury homes for months at a time and then all of a sudden in the past few weeks, we get three offers in one week on homes that have had no activity. It is very volatile at the moment.”

According to the website of Mike Fotiou, associate broker with First Place Realty, there were 74 luxury home sales in June, setting a record for the most $1-million plus sales for the month of June. The month was capped by the record sale last week of a home in Crescent Heights for $11.1 million. The all-time monthly record for luxury home sales was established in May at 84.

(Editor’s note: June data in graphic based on preliminary data)

Year-to-date until the end of June, said Fotiou, there have been 394 luxury home sales, up from 299 for the same period last year, which set a record of 544 sales for the year.

The mid-year total so far this year has already surpassed year-end totals for 2010 (365), 2009 (337), and 2008 (369), pointed out Fotiou.

According to CREB’s website, there were 2,317 total MLS sales in the city in June, an increase of 5.51 per cent from last year. The median price rose by 3.32 per cent to $405,000.

In the single-family market, sales rose by 2.06 per cent to 1,638 and the median price was up by 4.65 per cent to $450,000.

The condo apartment category saw sales rise by 6.78 per cent to 362 units with the average price dipping by 0.35 per cent to $301,192 but the median price rising by 2.12 per cent to $265,500.

The condo townhouse category experienced a sales increase of 25.79 per cent to 317 units as the average price moved upwards by 5.14 per cent to $341,518 and the median price increased by 5.35 per cent to $305,000.

And the towns outside of Calgary market had sales remain the same at 476 transactions in June but the average price was up by 7.11 per cent to $377,576 and the median price rose by 6.34 per cent to $361,500.

© Copyright (c) The Calgary Herald    Buy this article at

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Price of Calgary single-family homes continue to rise

May 30th, 2013 by bradylayton

CALGARY- The price of single-family homes continues to rise.

New numbers from the Calgary Real Estate Board show the average price reached a new high of $452,900 in April—the highest they’ve been since 2007.

“It’s really encouraging to see that the Calgary market remains strong,” said Becky Walters, president of CREB’s board of directors. “It’s reassuring to both buyers and sellers to see that this area is outperforming many parts of the country.”

There were 1,611 sales of single family homes last month, which is a two per cent increase from the same month last year.

The condo market also continues to thrive, with 1,258 units sold in the first four months of 2013. That’s an 11 per cent jump from 2012.

Tamara Elliott
Online Reporter Global News

Calgary a bright light among Canadian housing markets

May 15th, 2013 by bradylayton

CALGARY — Calgary’s resale housing market continued to shine in April compared with the rest of the country as the city recorded the best year-over-year price growth and the biggest annual sales increase among major markets.

The Canadian Real Estate Association, in releasing its monthly MLS data on Wednesday, said Calgary saw sales of 3,003 for the month, a jump of 10.4 per cent and the association’s MLS Home Price Index, which surveys eight major markets in the country, showed Calgary leading the way with a 6.94 per cent year-over-year hike. The index tracks benchmark property sales.

In Canada, overall sales dipped by 3.1 per cent to 47,997 in April and the aggregate benchmark price was up 2.22 per cent.

“Since changes to mortgage rules made in 2012 took effect, national sales have been running nine to 10 per cent below levels posted in the first half of 2012 but they’ve been remarkably steady,” said Gregory Klump, CREA’s chief economist. “April activity was on par with where it stood last August, and month-to-month changes since then have held to within a range of plus or minus two per cent.”

The average MLS sale price in Calgary was up 3.6 per cent to $429,717 while new listings rose by 6.7 per cent to 4,664.

In Canada, the average sale price increased by 1.3 per cent to $380,588 and new listings rose by 5.6 per cent to 95,065.

For Alberta, sales were up by 5.0 per cent to 6,501; new listings rose by 5.0 per cent to 11,253; and the average price increased by 3.6 per cent to $378,892.

Sonya Gulati, senior economist with TD Economics, said we are continuing to see signs of a spring thaw in the Canadian housing market, an encouraging development especially heading into the all-important spring home-buying season.

“Just last month, home sales activity were down roughly 15 per cent, year-over-year. The same statistic this month is three per cent,” she said. “Price gains are also flirting with positive territory, albeit marginally above the zero threshold. As foreshadowed by our analysis, the impacts of the mortgage-rule induced slowdown are proving to be temporary.

“While there are signs of promise in the housing market, it is important to clarify expectations so everyone is on the same page. We do not anticipate a marked revival in the Canadian housing market in the months ahead. There simply is no economic impetus for a full-fledged comeback in the cards. In turn, the 2013 spring home-buying season should be mediocre at best.”

Douglas Porter, chief economist with BMO Capital Markets, said evidence continues to mount that the Canadian housing market seems to have pulled off the fabled soft landing.

He said surprises on the sales data in recent months have consistently been on the high side of expectations, not the low side.

“While some are highlighting the fact that prices are now rising at ‘their slowest pace since the 2009 recession’ the plain facts are that: a) they are still rising, and b) faster than inflation, and c) prices are at all-time highs. Some meltdown,” he said.

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Calgary home prices not too high

April 15th, 2013 by bradylayton

The chief economist with Calgary’s real estate board is downplaying a new report by a global rating agency that estimates home prices in Alberta are overvalued by about 15 per cent.

Ann-Marie Lurie says a lot of correction occurred in Calgary after real estate prices dipped in 2007.

“Moving forward, while I don’t expect strong price growth, I do expect that we will continue to see price growth,” she said.

Employment and migration growth tend to buoy prices in Alberta, said Lurie, who expects to see modest price gains this spring.

“Those two factors have really encouraged that growth in our marketplace. And because supply levels have tightened that has caused some of these price increases that we have seen.”

The average price of a Calgary home was $457,179 in February, up seven per cent from a year earlier.

Although the Fitch agency says prices may be 20 per cent too high in some Canadian markets, in reality the rating agency says it’s unlikely for prices to suddenly drop by that amount because of price momentum and inflation.

Fitch says the actual price decline in Canada could be closer to 10 per cent, taking place over several years.

Of course, the decline could vary greatly by region. Fitch says prices in Alberta would likely fall by several per cent, while in B.C. and Quebec the correction could be as high as 15 per cent.

Calgary resale listings on the decline

March 12th, 2013 by bradylayton

If you are potential homebuyer these days in the Calgary market, you’ve probably noticed the number of properties listed for sale isn’t what it was like a year ago.

Numbers by the Calgary Real Estate Board on MLS listings certainly point that out.

According to CREB, up to March 11, new listings during the month have dropped by 4.13 per cent from a year ago to 1,161. And active listings are down by a whopping 25.29 per cent to 3,755.

Year-to-date, new listings are off by 4.51 per cent from the same period a year ago to 6,325.

Combined with the decline is a trend of homes selling faster.

So far in March, days on the market for a sale are 37, down from 44 last year. Year-to-date, days on the market have declined to 42 in 2013 from 51 for the same period in 2012.

BMO’s low mortgage rate might not make for much of a mortgage war after all

March 5th, 2013 by bradylayton

Investors rushing to BMO’s stock following its new mortgage offer might want to think twice.

BMO brought back its 2.99% five-year fixed-rate mortgage on Friday as concerns of a cooling housing market has banks becoming increasingly competitive about roping in new customers. Last year, BMO set off a price war with its competitors by offering its 2.99% rate — a record low for one of the major banks on a five-year fixed rate.

“The market will once again begin talking about pricing pressure in the domestic mortgage market,” said John Aiken, an analyst at Barclays Capital.

Last month, Canada Mortgage and Housing Corp. said new housing construction is expected to be lower this year due to moderate economic and employment growth in the second half of 2012. The Teranet-National Bank index of Canadian housing prices in January continued to show the effects of a cooling trend that has hovered over the real estate market for more than a year.

.So it’s no surprise BMO introduced the 2.99% rate, and it’s likely that other banks will follow in its footsteps. But Mr. Aiken notes that for all the talk of a new mortgage war breaking out, the past shows that it’s more likely to be a stalemate than a war.

“While similar concerns arose last year, we note that it had very little impact on the industry,” he said. “Similar to last year, we do not anticipate much market disruption (share or margins) for the group, although it could once again put BMO’s margins under pressure.”

Mr. Aiken rates BMO’s stock as underweight, with a price target of $64.00, compared with BMO’s Friday close of $64.08.

With files from the Canadian Press

Bank of Canada signals rates likely on hold until 2014

February 25th, 2013 by bradylayton

Wed, 01/23/2013 – 16:31
The Bank of Canada announced on January 23rd, 2013 that it is keeping its key policy interest rate at 1 per cent, where it has been held for more than two years. In providing guidance on where interest rates are heading, the Bank said interest rate hikes are “less imminent than previously anticipated.”

The Bank acknowledged that Canadian economic growth slowed more abruptly in the second half of 2012 than it had previously anticipated. It also recognized a marked deceleration in the growth of household debt, moderation in the housing sector, and softer than expected inflation.

The Bank now expects inflation to return to its 2 per cent target sometime in the second half of 2014. That represents a significant weakening in the Bank’s outlook for inflation; in October, the Bank expected inflation to return to target by the end of 2013. Consumer Price Inflation rose by 0.8 per cent in November 2012.

The Bank said it still expects the Canadian economy to gain strength this year, but it lowered its forecast for economic growth to just 2 per cent in 2013. By contrast, its growth forecast for 2014 was raised to 2.7 per cent versus its previous forecast reading of 2.4 per cent contained in its previous Monetary Policy Report (MPR) published in October 2012.

The bottom line is that economic growth is expected to remain modest but positive, consistent with low inflation and low interest rates. At the same time, growth in household debt burdens, which the Bank has repeatedly flagged as a major risk in this low interest rate environment, is showing positive signs of topping out as housing market activity continues to stabilize at a more sustainable levels. Combined with extremely well anchored expectations for inflation, that means the Bank is in no hurry to raise interest rates anytime soon, with the first such move in that direction unlikely to be for at least another year.

As of January 23rd, 2012, the advertised five-year lending rate stood at 5.24 per cent. It has been unchanged at this level since the beginning of June 2012.

Brady Layton, BComm, CFP, Remax Landan Real Estate
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