Is another housing boom in Calgary’s future? According to the Canada Mortgage and Housing Corporation, CMHC for short, that may be the case. The firm predicts a 24.8 percent increase in housing starts in 2012, going from 9,292 homes in 2011 to an estimated 11,600 by the end of this year. The CMNC also expects home prices to increase from the $402,851 average seen in 2011 to $410,000 by the end of 2012 and to $420,000 by the end of 2013.
Senior analyst Richard Cho noted that the largest increases in starts are in the apartment/condo style market. All in all the positive numbers are the result of the still low interest rates on mortgages, more people migrating into the city, higher incomes and more jobs coming up available. Calgary’s job growth is strong because many of province’s energy related industries are headquartered in the city.
All of this activity has the market for 2012 favouring the seller, whereas last year the buyer had a slight advantage. Even so, the real estate market is considered fairly balanced, more so than in 2011. There are fewer listings going on the market this year than last, at the same time prices are going up.
The Calgary Real Estate Board’s president Bob Jablonski also notes that the numbers mean the market is healthy. Consumer confidence is up, as are sales and that is good for the economy. Sales have been in positive territory since the beginning of 2012.
The challenge now, noted Alderman Gian-Carlo Carra, is to make sure enough units, in a variety of price points, are available. Carra noted that had council been more open to secondary suites it would have been better for the city. If the boom continues and prices continue to rise while at the same time inventory decreases, that may leave more potential homeowners out of the game. That additional rental income may have made all the difference.