Calgary Tops CREA List For Real Estate Price Growth In Canada

Posted by Alan Zunec on Thursday, March 21st, 2013 at 1:19pm.

The Canadian Real Estate Association released their MLS Home Price Index report this past Friday. In it, Calgary came out on top for the largest annual price increase in February. But, the city also saw a decline in the number of MLS sales. That decline was at the two percent level, a far cry from the national average of almost 16 percent when comparing February of this year to that of 2012.

The association also released its updated sales forecast for 2013, both for the national and Alberta markets. CREA did note that Calgary’s price growth did show an 8 percent increase comparing this February to last. The agency noted this was the strongest price showing since the spring sales of 2010. Regina came in second, with a 5.93 percent increase.

Seven markets were surveyed for HPI. On a nationwide basis, the average price growth on a year over year basis was 2.69 percent. Those working with real estate boards think that the HPI is a more accurate tool for measuring price trends.

The Calgary Real Estate Board’s chief economist, Ann-Marie Lurie, noted that home prices in Calgary have been boosted by the favorable economic climate and fewer available homes on the market. The single family sector is much tighter than the condo situation, thus supporting the price increases. But, condo sales are starting to pick up as well.

Calgary saw 2,071 sales through the MLS system this past February, which is a two percent decrease over the same month in 2012. Across Canada, there was a 15.8 percent drop, with this February only seeing 31,123 sales through the system.

Lurie did note that 2012 was a leap year and if that extra day was deleted, the sales in Calgary would turn out to be the same. The city is seeing a strong inbound migration, increased job availability and a decrease in the number of available rentals.

More and more economists are embracing the soft landing scenario rather than the more aggressive bubble bursting scenario. Diana Petramala with TD Economics is one that is onboard with the soft landing theory. She notes the gradual slowdown over the last eight months, largely attributed to the change in mortgage laws this past July. The one percent interest rates are keeping the market going, but the tighter regulations have just slowed things down a bit. Petramala notes that currently sales and inventory numbers are at a comfortable level.

The average sales price for a home in Calgary, across all housing types, was $438,755, which is an 8.2 percent increase over February of 2012. Nationwide sales prices for the same period were down by one percent, at $368,895. Alberta stood out as the only province showing an increase in sales growth comparing this February to last. The province saw 4,512 sales through the MLS system, a 0.8 percent increase over 2012. Average home sales price province wide was $378,685, an increase of 5.3 percent.

CREA also predicted that Alberta would have the best annual price increases across Canada for the next two years.  Sales price averages are predicted to increase by 3.6 percent, going to $376,400 per sale for 2013. In 2014 that increase is expected to be 3.5 percent, with an average price of $368,700.  

Across Canada, the prediction for 2013 is a decrease of 0.2 percent for an average home price of $363,600. In 2013 the expectations are an increase of 1.7 percent and an average home price of $368,700.

Sales in Alberta for 2013 are expected to increase by 0.4 percent with 60,600 homes changing hands. In 2014, the forecast is for an additional 4.5 percent increase and sales numbering 62,700.

Nationwide, sales in 2013 are expected to decrease by 2.9 percent, with 441,500 homes sold. Things will reverse in 2014 with a 4.5 percent increase and 462,200 homes changing hands.

Mortgage rates and rules are expected to remain the same for the foreseeable future, which should keep things less volatile than in the past few years.

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