Calgary housing market forges on despite June flooding

Affordability levels among best in Canada

 

By Mario Toneguzzi, Calgary Herald August 26, 2013

 

                            

CALGARY — Not even the worst floods in memory in June appear to have slowed the Calgary housing market’s progression this year, says a report by RBC Economics Research.
“A strong provincial economy, solid labour market, fast-rising population, and attractive affordability continue to fuel demand for Calgary housing,” said the bank’s latest Housing Trends and Affordability Report.
It said monthly resale activity increased for six straight months, including in June (rising 1.1 per cent month-over-month) and July (up 3.1 per cent). On a quarterly basis, home resales in the area posted their second-strongest gain (12 per cent) in four years in the second quarter.
“While prices recently embarked on a more steeply upward trajectory, the effect of faster-rising prices has yet to undermine affordability in any material way,” said RBC. “In fact, affordability levels in Calgary continue to be among the better in Canada.”
RBC measures for Calgary showed little movement across all housing categories in the second quarter of 2013. RBC’s measure for two-storey homes rose by 0.5 percentage points to 33.6 per cent and for condominium apartments edged lower by 0.2 percentage points to 19.4 per cent; the measure for bungalows remained unchanged at 33.0 per cent.
The RBC Housing Affordability Measures show the proportion of median pre-tax household income that would be required to service the cost of mortgage payments (principal and interest), property taxes and utilities.
RBC said Alberta homebuyers continued to enjoy a relatively affordable housing market in the second quarter, despite some increases in ownership costs in late 2012 and early 2013.
“Despite the fact that the market has kicked into higher gear since spring — thereby boosting prices and increasing ownership costs — Alberta continues to be a relatively affordable market,” said Craig Wright, senior vice-president and chief economist with RBC. “We will likely see some disruptions in market activity trickle through in summer data from the floods in southern Alberta; however, we anticipate the strong provincial economy will endure, supporting further housing growth in 2014.”
RBC’s affordability measure rose by 0.7 percentage points to 32.4 per cent for bungalows and 0.4 percentage points to 34.5 per cent for two-storey homes. The measure for condominiums rose slightly by 0.1 percentage points to 19.6 per cent.
All measures stood at a level below their long-term average, indicating that home ownership in the province remained historically attractive, said RBC.
Nationally, during the second quarter, affordability measures rose for two of the three categories of homes tracked. RBC’s measure for the detached bungalow rose 0.3 percentage points and for the standard two-storey home rose 0.4 percentage points to 42.7 per cent and 48.4 per cent, respectively. The measure for the standard condominium was unchanged at 27.9 per cent.
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Calgary MLS sales in August on pace for 2nd highest ever

 August 2005 set the record

 

By Mario Toneguzzi, Calgary Herald August 23, 2013

 

                                              

CALGARY — Calgary home sales are on pace for the highest August total since 2005 and the second highest on record for the month, says a Calgary realtor.
Mike Fotiou, associate broker of First Place Realty, said month-to-date between August 1-21 there have been 1,462 MLS sales in the city, up 32.4 per cent from last year.
That’s down from the 1,516 sales pace set in August 2005 for the same period. Sales ended up at 2,326 for the entire month of August in 2005.
According to the Calgary Real Estate Board, for the first three weeks of August, the average sale price increased by 10.14 per cent to $456,105 and active listings of 4,089 were down 24.57 per cent.
Tanya Eklund, with RE/MAX Real Estate (Central) in Calgary, said there are so many factors that have helped the real estate market reach such impressive numbers.
“The flood did throw a wrench into things in some communities, yet we have seen other communities flourish from the flood. As long as the price of oil stays strong, the pipeline out east goes forward, the vacancy rate stays low, all of these will contribute to the continued strength in our economy,” said Eklund in a live Herald web chat on the real estate market with Ann-Marie Lurie, CREB’s chief economist and Don Campbell, senior analyst and founding partner of the Real Estate Investment Network.
“We are in a seller’s market currently I would say. I base it on number of sales versus listings and I also consider days on market. We are fairly low in inventory based on last year and our sales have increased substantially.”
Campbell said Calgary entered the year with a real estate market that was performing exactly how it should have been, based on its underlying economics.
“While the world turmoil was continuing to grow, Calgary’s economy almost felt sheltered from the storm. Economic growth, population growth, housing demand right on trend ... then the floods hit and turned the city and its market upside down,” he said.
He said, now post flood, the numbers will not be indicative of the actual underlying market and although will still look good, they won’t be reflective of how the market is really performing.
“The bottom line is this: the results of this flood will play a role in the housing numbers for at least 12 months in all cities and towns affected by it and will skew the market health readings,” he said.
Lurie said strong resale growth numbers will likely persist for much of this year, outside of the flood, as migration levels posted stronger than expected levels, supporting stronger than expected demand growth.
“The housing market will continue to benefit due to strong fundamentals, assuming the energy sector remains strong,” she said.

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Calgary luxury home market sets sales record for August

 MLS sales over $1 million top August 2007 peak

 

By Mario Toneguzzi, Calgary Herald August 20, 2013 12:03 PM

 

 

 

CALGARY — Calgary’s luxury home market continues to boom.
According to Mike Fotiou, associate broker for First Place Realty in Calgary, luxury home sales in the city have already broke the August record previously set in 2007.
And a third of the month still remains.
Between August 1-19, Fotiou says a total of 42 homes sold for $1 million or more on the MLS market.
In August 2007, there were 38 sales in that price range.
“Even if no more high-end homes sell for the remainder of August, sales would still end up 31 per cent (year-over-year),” writes Fotiou on his website, adding that nine listings in that upper-end market are currently reported as conditionally sold.
“Year-to-date, 502 properties have sold for ($1-million plus) compared to 352 during the same period last year. By the end of 2012, which was a record year itself, 544 luxury homes had sold. If this torrid sales pace holds up, that record will be handily surpassed around the end of September or early October.”
So far in August, 38 single-family homes and four condos have sold in that price range.
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Calgary leads country in housing market price growth

Prices up nearly 7% from last year

 

By Mario Toneguzzi, Calgary Herald August 15, 2013

 

 

 

CALGARY — Calgary led the country in July with the best year-over-year price growth in the resale housing market.
The Canadian Real Estate Association’s MLS Home Price Index, released Thursday, indicated prices in Calgary were up 6.79 per cent — more than doubling the national aggregate of 2.66 per cent price growth.
The index measures the rate at which housing prices change over time taking into account the type of homes sold. Nine major Canadian centres are surveyed.
“Our market is trending towards a selling market. Listing inventory is 20 per cent lower than this time last year and pricing is approximately seven per cent higher overall,” said Tanya Eklund, with RE/MAX Real Estate (Central) in Calgary. “The Calgary floods created a short-term surge in house purchases in certain areas. People who could afford to buy have purchased, so their families were not displaced. Due to the very low vacancy rate, rental inflation and difficulty in finding rental accommodation, this made some consumers turn to purchasing instead of renting.
“We are seeing many inner-city communities flourish with sales, however I am seeing certain suburb markets higher in inventory in the plus $1 million, so sales have not been as abundant as other communities closer to the interior of the city. Overall, it appears to be a great time to sell. Buyers have less time to think about their purchases with hopes of not losing out on their ideal home. I am confident we will continue to see a stable real estate market as we enter into the fall.”
CREA stats indicated Calgary MLS sales in July of 2,976 were up 18.9 per cent from last year while the average sale price jumped by 7.0 per cent to $438,192.
Across Canada, sales were up by 9.4 per cent to 44,829 units and the average price rose by 8.4 per cent to $382,373.
In Alberta, transactions increased by 17.8 per cent to 6,853 units while the average price was up by 4.3 per cent to $379,696.
“Canadian home sales have staged a bit of a recovery in recent months after having declined in the wake of tightened mortgage rules and lending guidelines last year, but the numbers for July suggest that national activity is levelling off at what might best be described as average levels,” said Gregory Klump, CREA’s chief economist. “Sales dropped sharply in August last year, so we may see some year-over-year increases in sales and average prices next month that would reflect weakness in the rear view mirror.”
Sales and prices in Calgary are continuing their upward trend in August. According to the Calgary Real Estate Board, month-to-date until Wednesday, total MLS sales of 945 were 32.17 per cent higher than the same period last year and the average sale price was up 13 per cent to $455,688.
In another report released Thursday, Canada Mortgage and Housing Corp. forecast MLS sales in the Calgary census metropolitan area to rise to 27,800 transactions this year from 26,634 in 2012. Sales are expected to jump to 28,300 in 2014.
The agency forecast the average MLS sale price in the Calgary region to rise from $412,315 in 2012 to $435,000 in 2013 and to $445,000 in 2014.

Nationally, the CMHC’s point forecast is for MLS sales across Canada to decline from 453,372 in 2012 to 448,900 this year and then rise to 467,600 in 2014.
The national average sale price is expected to see year-over-year growth of 2.7 per cent this year to $374,800 followed by an increase of 2.1 per cent in 2014 to $382,800.
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Calgary prices for repeat home sales continue to climb

Up 5.9% in July from last year

By Mario Toneguzzi, Calgary Herald August 14, 2013

 

 

 

CALGARY — Prices for repeat home sales in Calgary continued to climb in July, registering the second highest year-over-year hike in the country, according to the Teranet-National Bank House Price Index.
The index, released on Wednesday, showed Calgary prices rose by 5.9 per cent from July 2012. Only Hamilton had a bigger increase at 6.7 per cent.
“As one of the fastest growing urban areas in North America, Calgary also has one of the hottest real estate markets,” said Todd Hirsch, chief economist with ATB Financial. “Prices for both new and existing homes are on the rise again. And judging from some other measurements of real estate activity, the market could be tilting further in favour of the seller.
“The ratio of home sales to new listings gives a good read on the overall balance in the residential market. A ratio of 0.5 means that for every home that is sold, two other homes are put on to the market. In Calgary, the most recent ratio of sales to listings is 0.83 — meaning that almost as many homes are being sold as new or existing ones are listed.”
Comparing July of 2013 to the same month in the previous two years, it is clear that the city’s real estate market has heated up, added Hirsch.
“In July 2011, the sales-to-new listing ratio was a balanced 0.56; in July 2012 it had ramped up to 0.73,” he said. “But last month, the ratio had climbed to one of the highest readings in recent years. And given that the city’s population is expanding rapidly with the inflow of interprovincial and international migrants, either more inventory of homes will have to be brought onto the market — or else prices can be expected to climb even more.”
The composite index of 11 centres in Canada saw a yearly hike of 1.9 per cent to an all-time high in July, as did the indexes of four of the 11 metropolitan markets covered by the composite index: Hamilton, Toronto, Ottawa-Gatineau and Quebec City.
Marc Pinsonneault, senior economist with the National Bank of Canada, said by way of comparison, the Case-Shiller home price index of 20 U.S. metropolitan markets was up 12.1 per cent from a year earlier in May.
In Canada, the price rise over the 12 months ending in July exceeded the cross-country average in six of the 11 markets: Hamilton, Calgary, Quebec City (3.8 per cent), Edmonton (3.5 per cent), Toronto (3.4 per cent) and Winnipeg (3.2 per cent). It lagged the average in Halifax (1.5 per cent), Montreal (1.1 per cent) and Ottawa-Gatineau (0.9 per cent). Prices were down from a year earlier for a fifth straight month in Victoria (4.0 per cent) and for a 12th straight month in Vancouver (2.0 per cent).
The July composite index was up 0.7 per cent from June.
“Though this increase may seem substantial, it is somewhat below the seasonal norm. Over the last 12 years, the average July gain has been 1.0 per cent,” said Pinsonneault.
In July, prices were up from the month before in nine of the 11 markets surveyed. The increase exceeded the national average in four markets: Victoria (2.6 per cent), Hamilton (1.8 per cent), Toronto (1.3 per cent) and Edmonton (0.8 per cent). It lagged the average in Calgary (0.5 per cent) and in Vancouver, Ottawa-Gatineau and Quebec City (0.3 per cent). In Montreal prices were flat from the month before. In Winnipeg (0.4 per cent) and Halifax (0.6 per cent), prices were down on the month.

The Teranet — National Bank House Price Index is estimated by tracking ob­served or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.
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Calgary leads nation in building permit growth

June value up 16.6% from May

 

By Mario Toneguzzi, Calgary Herald August 7, 2013 10:00 AM

 

 

 

 

The value of building permits in June was trending upwards in the Calgary region.

Photograph by: Gavin Young Gavin Young , Calgary Herald

CALGARY — Calgary saw the country’s largest increase in June in the total value of building permits, according to Statistics Canada.
The federal agency reported Wednesday that estimated building permit value was $537.7 million for the Calgary region, up 16.6 per cent from May and a year-over-year hike of 36.0 per cent.
“Following a 41.0 per cent decline in May, the value of permits issued in Calgary advanced largely as a result of higher construction intentions for commercial buildings and multi-family dwellings,” it said.
Tom Dixon, business development manager for real estate and logistics with Calgary Economic Development, said there has been an increase in activity recently in the non-residential sector in Calgary.
“The principal factor is there is a very low vacancy rate and there’s low availability in both the industrial portfolio and in downtown office space. The Class A office space in particular is in very short supply,” said Dixon.
According to Statistics Canada, the residential sector in Calgary saw a 3.7 per cent increase in building permits from May to $344.5 million while the non-residential sector was up 49.65 per cent to $193.2 million.
In Alberta, total building permits of $1.4 billion were down 0.4 per cent on a monthly basis but up 24.3 per cent year-over-year.
The residential sector in the province saw a monthly decrease of 10.4 per cent to $757.9 million. However, that was up 15.8 per cent from last year.
The non-residential sector in Alberta jumped to $645.4 million, up 14.7 per cent from May and a hike of 36.1 per cent from June 2012.
Todd Hirsch, chief economist with ATB Financial, said a dip in residential permits in June in Alberta was almost exactly offset by a rise in non-residential permits.
“Residential building in our province has been consistently strong in 2013, so a small pull-back, as occurred in June, is neither unusual or cause for alarm,” he said. “The steady inflow of job-seeking migrants to the province this year has kept the demand for housing at a healthy level.”
He said non-residential building permits are much more volatile month-to-month but in June developers in the province continued to find market opportunities in office buildings, stores and restaurants.
“Building permits are an excellent forward-looking indicator of the actual construction activity that can be expected in the coming months,” added Hirsch. “The overall message . . . is that Alberta’s construction sector remains in excellent shape.”
Across Canada, contractors took out building permits worth $6.6 billion in June, down 10.3 per cent from May and the first decrease in six months. It was also off 4.8 per cent from June 2012.
After three consecutive monthly increases, the total value of permits in the residential sector declined 12.9 per cent to $4.0 billion in June. That was also down 10.8 per cent from a year ago.
In the non-residential sector, the total value of building permits decreased 6.1 per cent to $2.7 billion in June. But that was up 5.8 per cent from last year.

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Calgary Real Estate Sales UP 17% in July

Calgary real estate sales up 17 per cent in July

 

Experts say flooding may have contributed to increased activity

 

By Amanda Stephenson, Calgary Herald August 1, 2013

 

                                           

 

CALGARY, AB: June 25, 2012 - A For Sale sign sticks out of the water in the backyard of a home across Elbow Drive near 29th ave in Calgary which runs along the rising waters of the Elbow river. Because of the snow pack melt and rain water the river is getting dangerously close to flooding homes along the river already flooding, pathways in the Elbow Park and Mission areas on Monday June 25, 2012. (Dean Bicknell / Calgary Herald) (For City story by Sherri Zickefoose) 10038854A

Photograph by: Dean Bicknell , Calgary Herald

CALGARY - The Calgary real estate market saw its busiest July since 2009, but the jury is still out on whether last month’s increased activity was connected to the June flooding.
Residential sales for the City of Calgary totalled 2,268 units in July, a 17 per cent increase over the same period last year. Citywide prices were nearly seven per cent higher than levels recorded a year ago, with a July 2013 benchmark price of $414,100.
“We had a big month,” said Calgary real estate agent Jim Sparrow. “It’s surprising to see this kind of activity ... As the flood waters have gone down, the sales and prices have gone up.”
Ann-Marie Lurie, chief economist for the Calgary Real Estate Board, said there is no good way to measure the effect of flooding on real estate sales.
“But yes, there have been people who have been displaced, and renters who have been pushed into ownership a lot sooner,” she said.
Another factor, Lurie said, is that people who were already in the market for a home may have decided to hurry their decision over fears that the flood could lead to tightened supplies and increased prices.
Still, Lurie said most of the increased sales volume likely had little to do with the flood at all, and more to do with market conditions. Notably, the strongest growth occurred in the condo market, which saw a 26 per cent increase in overall sales over the previous year. For single family homes, the increase was 14 per cent.
Lurie said the rapid increase in condo sales versus single family homes is due to affordability.
“The single-family market was a seller’s market before the condo market was. And as we saw that level of affordable product start to decline, we started to see people start to turn toward the condo market,” she said.
Real estate analyst Don Campbell, of the Real Estate Investment Network, said Calgary’s statistics are likely to be slightly skewed for the next several months, as the impact of the flooding will influence figures like total listings and days-on-market.
“These numbers will no longer reflect the true direction of the market,” he said.
Campbell said he expects demand will remain strong, but added it will be interesting to see where it is focused.
“I think we are going to see a shift in demand toward neighbourhoods on higher ground over the next three to six months,” he said.
Tight market conditions remain for both single family and condominiums. Year-over-year new listings increased in July to 1,958 units, but overall active listings declined to 2,917 units, nearly 20 per cent lower than the already declining levels recorded in 2012.
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