Expanding Economy to Drive Demand for Housing in Calgary Region: CMHC

     Demand for housing in the Calgary region is expected to increase next year as the economy expands, creating jobs and attracting more people here, says Canada Mortgage and Housing Corp.
     MLS residential sales this year are expected to end the year at 22,200 units, an increase of 5.7 per cent from 20,996 in 2010, says the CMHC in its latest housing market outlook. released Friday.
     Sales in the Calgary census metropolitan area in 2012 are anticipated to rise another 2.3 per cent to 22,700 units.
With elevated listings relative to sales, average price growth has been modest in 2011, says the CMHC report.
     The average price for 2011 is forecast to be $402,000, up 0.8 per cent from 2010.
     “As the supply in the resale market moves lower and conditions become more balanced, stronger price growth is expected next year. In 2012, the average price is anticipated to rise 2.2 per cent to $411,000,” it said.
Total housing starts in the Calgary CMA are on pace to decrease this year before rising next year.
     “After a lower level of activity this year, new construction in 2012 is anticipated to rise as job creation, stronger net migration, and low mortgage rates support the housing market,” said Richard Cho, senior market analyst in Calgary for the CMHC.
     Total housing starts next year are forecast to increase 11 per cent to 9,400 units, with gains in both the single-detached and multi-family markets.
Single-detached starts are forecast to reach 5,000 units this year, down 14 per cent from 5,782 units in 2010.
     “Builders will encounter less competition from the resale market next year as listings moderate,” said Cho.
     Single-detached starts are forecast to increase 10 per cent from 5,000 units in 2011 to 5,500 units in 2012. Following a 126 per cent gain in 2010, housing starts in the multi-family market, which include semi-detached units, rows, and apartments, have moderated this year, with some segments busier than others.
     In 2011, multi-family starts are forecast to total 3,500 units, up 0.6 per cent from 3,480 units in 2010. Multi-family starts are projected to rise 11.4 per cent to 3,900 units in 2012.
mtoneguzzi@calgaryherald.com

Single Family Homes Drive Gradual Recovery...

Improved sales in the single family home market have largely been offset by declining sales in the condominium market, indicating that the gradual recovery will continue to be driven by the single family market for the better portion of the year. 

The NW sector boasted the largest gains in single family home sales in the first quarter of 2011 with a 13% increase over the first quarter of 2010.  Sales in the SE posted quarterly gains of 5%, while the SW remained relatively unchanged and NE sales declined by 9%.

The SW sector recorded the highest single family average home price in the first quarter of 2011 at $570,748 while average home prices in the NW and SE were $464,990 and $422,821 respectively.  The NE sector continues to remain the most affordable, with average prices hovering around $282,713.

Calgary's labour market has shown some recent improvements, however, it is still in the early stages of recovery as job growth remains below the 5-year average.  Improvements in the energy sector are anticipated to show stronger job growth in the second half of the year, providing the foundation for continued recovery in the housing market.
Source: CREB(R)

Calgary Home Sales Rise Year-Over-Year

Single family home sales in the City of Calgary edged upwards month-over-month and showed the first year-over-year increase since April 2010.

The number of single family homes sales in the month of January 2011 were 791, compared with December 2010, when sales were 734 - an increase of about 8%.  The number of condominium sales for the month of January 2011 was 302.  This was down from the 320 condominium transactions recorded in December 2010.

The median price of a single family home in the city of Calgary for January 2011 was $390,000, showing a slight increase from December 2010 when the median price was $389,000.  This is a 2% decrease from January 2010 when the median price was $398,000.

The median price for a condominium in January 2011 was $255,000 showing a 1% decrease from December 2010, when the median price was $258,500, and a 4% decrease from January 2010, when it was $265,000.

The recovery in 2011 will be incremental and gradual.  Nonetheless, at the moment Calgary is offering buyers a great deal of affordability, low interest rates and a large selection of inventory.
Source:  CREB(R)

Employment and Migration Needed to Shake Off Winter Chill...

Home and condo sales in Calgary remained relatively unchanged in December 2010, indicating that a full-fledged recovery in the housing market has yet to take hold.

Undoubtedly housing markets in Alberta and Calgary underperformed in 2010, as sales recoveries did not materialize as forecasted.  In many ways, re-sales in 2010 showed a repeat of 2008, with a short lived resurgence in the first few months, when confidence returned to the market.

Employment and net-migration have been slower to pick up here in Calgary - and these are key drivers in our housing market.

All in all we believe it will be a slow and gradual warm up in 2011, but it will take some time for the housing market to bring inventory levels down and shake off these winter blues.
Source: CREB(R)