Calgary Takes Top Spot As Healthiest Canadian Real Estate Market

Posted by Alan Zunec on Saturday, January 19th, 2013 at 10:49am.

The Canadian Real Estate Association released a report this past Tuesday, noting that the only major metro area to see an increase in MLS sales during this past December was Calgary. Nationwide things were an entirely different story with the markets taking deep dives in sales.

Calgary saw 1,343 sales go through the MLS system this past December, a 7.2 percent increase over sales during the same month in 2011. Nationwide, Canada experienced a decrease in sales of 17.4 percent with only 20,538 properties changing hands. Sales prices for the month also saw an increase in Calgary, with a 6.9 percent increase year over year and an average unit price of $419,811. Nationwide the increase was a more modest 1.6 percent and an average price point of $352,787.

Looking at Calgary on an annual basis, the average sales number increased by 18.1 percent, with 26,634 transactions. Across Canada, sales numbers decreased by 1.1 percent with 453,372 sales. Prices were up in Calgary by 2.3 percent for the year, averaging $412,372 per home. Nationwide prices were up 0.3 percent with the average price per home at $363,740.

Senior analyst and partner of the Real Estate Investment Network, Don Campbell, noted that Calgary’s apparent awakening from a long real estate nap happened primarily because of two things. One is because the region had been underperforming for the past three years, both in sales and the number of new properties going up. It is now in catch up mode.

The other is the increase in the population which in 2012 hit record immigration numbers. People were coming to Calgary in search of work, putting a bit of a strain on the rental market. Rents went up and those that could went from being renters to homeowners. This trend is expected to continue throughout 2013 and the market will most likely improve upon the 2012 statistics.

The first two weeks of January are hinting that this assessment is correct. Already there have been 375 sales through the MLS system, which is a 9.87 percent jump over that period in 2012.  Sales prices were also up by 11.75 percent with the average coming in at $428,063 per unit.

Richard Cho, from the Calgary office of the Canada Mortgage and Housing Corporation noted that Calgary is doing so well because it has a strong economy, the best in the nation. That naturally creates a strong labor market with plenty of full time work and good salaries. Combine that with the current low mortgage rates and you have a recipe for success. Every worker does need a place to live, after all.

Alberta saw a 1.9 percent decrease in sales with 2,855 sales on the books for 2012. But province-wide the average sales price increased by 4.8 percent, coming in at $363,340 per unit. For the year Alberta saw an increase in sales of 12.3 percent, which was the highest increase seen across Canada. Sales price average also went up by 2.8 percent, coming in at $363,208 per home sale.

CREA put out its Home Price Index for December and in seven of Canada’s major markets, benchmark price average increased by 3.32 percent, collectively. Regina took the number one spot, with an increase of 10.53 percent. Calgary took second, with a benchmark average increase of 7.37 percent.

Chief economist for CREA, Gregory Klump, noted that December, like September of 2012, had fewer working days compared to the same months in 2011. That did account somewhat for the sales decrease. But Klump also noted that the latest round of mortgage rules, implemented last July, were still having an effect on the market despite the continued low interest rates. 

TD Economics’ Sonya Gulati, senior economist, noted that 2012 overall was rather a lackluster year for the housing market in Canada. Gulati noted that the 17.4 percent nationwide decrease seen was tied at least in part to the new rules and that by now the changes have been factored in. She expects the market to stabilize during the first few months of 2013.

Another analyst, Benjamin Reitzes from BMO Capital Markets, noted that the real estate market in Canada is still in cooling mode.  But rather than just look at the decline in sales for 2012, compared to the prior year, people should take note of the real estate prices. They have steadied and provided a soft landing rather than the all out bubble burst that so many had predicted.

The Canadian Real Estate Association released a report this past Tuesday, noting that the only major metro area to see an increase in MLS sales during this past December was Calgary. Nationwide things were an entirely different story with the markets taking deep dives in sales. 

 

Calgary saw 1,343 sales go through the MLS system this past December, a 7.2 percent increase over sales during the same month in 2011. Nationwide, Canada experienced a decrease in sales of 17.4 percent with only 20,538 properties changing hands. Sales prices for the month also saw an increase in Calgary, with a 6.9 percent increase year over year and an average unit price of $419,811. Nationwide the increase was a more modest 1.6 percent and an average price point of $352,787. 

 

Looking at Calgary on an annual basis, the average sales number increased by 18.1 percent, with 26,634 transactions. Across Canada, sales numbers decreased by 1.1 percent with 453,372 sales. Prices were up in Calgary by 2.3 percent for the year, averaging $412,372 per home. Nationwide prices were up 0.3 percent with the average price per home at $363,740.

 

Senior analyst and partner of the Real Estate Investment Network, Don Campbell, noted that Calgary’s apparent awakening from a long real estate nap happened primarily because of two things. One is because the region had been underperforming for the past three years, both in sales and the number of new properties going up. It is now in catch up mode.

 

The other is the increase in the population which in 2012 hit record immigration numbers. People were coming to Calgary in search of work, putting a bit of a strain on the rental market. Rents went up and those that could went from being renters to homeowners. This trend is expected to continue throughout 2013 and the market will most likely improve upon the 2012 statistics. 

 

The first two weeks of January are hinting that this assessment is correct. Already there have been 375 sales through the MLS system, which is a 9.87 percent jump over that period in 2012.  Sales prices were also up by 11.75 percent with the average coming in at $428,063 per unit. 

 

Richard Cho, from the Calgary office of the Canada Mortgage and Housing Corporation noted that Calgary is doing so well because it has a strong economy, the best in the nation. That naturally creates a strong labor market with plenty of full time work and good salaries. Combine that with the current low mortgage rates and you have a recipe for success. Every worker does need a place to live, after all. 

 

Alberta saw a 1.9 percent decrease in sales with 2,855 sales on the books for 2012. But province-wide the average sales price increased by 4.8 percent, coming in at $363,340 per unit. For the year Alberta saw an increase in sales of 12.3 percent, which was the highest increase seen across Canada. Sales price average also went up by 2.8 percent, coming in at $363,208 per home sale. 

 

CREA put out its Home Price Index for December and in seven of Canada’s major markets, benchmark price average increased by 3.32 percent, collectively. Regina took the number one spot, with an increase of 10.53 percent. Calgary took second, with a benchmark average increase of 7.37 percent. 

 

Chief economist for CREA, Gregory Klump, noted that December, like September of 2012, had fewer working days compared to the same months in 2011. That did account somewhat for the sales decrease. But Klump also noted that the latest round of mortgage rules, implemented last July, were still having an effect on the market despite the continued low interest rates.  

 

TD Economics’ Sonya Gulati, senior economist, noted that 2012 overall was rather a lackluster year for the housing market in Canada. Gulati noted that the 17.4 percent nationwide decrease seen was tied at least in part to the new rules and that by now the changes have been factored in. She expects the market to stabilize during the first few months of 2013. 

 

Another analyst, Benjamin Reitzes from BMO Capital Markets, noted that the real estate market in Canada is still in cooling mode.  But rather than just look at the decline in sales for 2012, compared to the prior year, people should take note of the real estate prices. They have steadied and provided a soft landing rather than the all out bubble burst that so many had predicted. 


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