Calgary Continues To Lead The WayPosted by Alan Zunec on Tuesday, May 21st, 2013 at 4:55pm.
The residential real estate market in the local area continues to be the most active and lucrative in the country, according to the latest statistics released. Annual sales continue to rise, as does the price of the average Calgary home. There were over 3000 real estate transactions during the month of April, a substantial increase from this time last year (over 10%). When compared to the entire country as a whole, Calgary is bucking the trend as overall sales in Canada actually went down last month (about 3%).
A lot of it boils down to the same factors that are being experienced throughout Alberta - employment and immigration. No matter what way you break it down, these are the primary contributers to the growth of the market. There aren't many places in the world that can offer residents so many vibrants opportunities for employment, let alone in Canada. The primary sector that is contributing to this surge in employment opportunities is of course oil and gas.
When you have so many great chances for full time employment, the influx of immigration can be quite rapid as Alberta has experienced many times in the past. High demand starts to put pressure on rent prices, which then inevitably leads to an increase in demand for home ownership. How many times have we heard you shouldn't waste money on rent? Well this is a common value amongst all people, so when the combination of gainful employment & higher rent prices come to fruition it's only a matter of time before this has a driving influence on real estate demand. More demand from the public for a great homes and condos means that sellers start to receive multiple offers or, better yet for the seller, the seller realizes the demand is high and sets the asking price high from the start.
While Calgary is experiencing a consistent upward trend in property values, it's still relatively affordable when compared to markets like Toronto or Vancouver. Unless humanity stops using oil and gas as their primary resource, Calgary could very well see a continuing increase in real estate prices over the next 5-10 years. My prediction would be about a 5% increase per year, so if you buy a home that costs $400,000 today it will be worth $600,000 in ten years. There aren't many stocks that will provide that sort of return!
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