Calgary luxury home market poised for another record year

Sales in 2013 rose by 34% behind only Vancouver’s 36% hike

 

By MARIO TONEGUZZI, Calgary Herald January 28, 2014                                                

 

 

$4,850,000: This 7,200 Sq. Ft. Bel Aire house is the most expensive house currently listed in Calgary. The main floor features a dream kitchen, bar, study, formal dining room and a magnificent great room.

Photograph by: Handout , MLS

CALGARY - Calgary’s luxury home resale market experienced a stunning record year in 2013 and a report released Tuesday suggests 2014 could see more of the same.
“With solid confidence in place, Calgary is expected to mirror 2013’s stellar performance, with the luxury market proving strong and steady,” said the RE/MAX Upper End Report. “Another record year is possible, particularly with the optimism that’s now building.”
Calgary’s resale market had 732 MLS transactions of $1 million plus in 2013.
The report, highlighting trends and developments in 16 major Canadian centres, revealed that 75 per cent of markets experienced year-over-year percentage increases in sales — including eight markets that posted double-digit gains. Greater Vancouver led the charge with a 36 per cent increase in luxury sales last year, followed by Calgary at 34 per cent, Edmonton at 32 per cent, Hamilton-Burlington at 31 per cent, Kitchener-Waterloo at 27 per cent, Winnipeg at 26 per cent, Greater Toronto at 18 per cent, and Saskatoon at 15 per cent.
Over two-thirds of markets set new records for high-end sales in 2013. Markets included St. John’s, Quebec City, Greater Toronto, Hamilton-Burlington, Kitchener-Waterloo, London-St. Thomas, Winnipeg, Regina, Saskatoon, Edmonton, and Calgary.
Tamara Pilipchuk, a realtor with RE/MAX Realty Professionals in Calgary, said Calgary’s luxury market is in hot demand and in short supply.
“Not only has the market recovered, but Calgarians see opportunity in the luxury market. With low interest rates and continued growth economically, the luxury market is both affordable and desirable,” she said. “Added pressure comes from increased foreign investment and inter-provincial migration as Calgary becomes more noticed on a global scale.
“There is tight inventory not only in the resale luxury market, but new construction builders are able to pre-sell lots for development upon release. New sale records are being set throughout all communities and all types of product. In a very short time, our housing market has not only recovered but is pushing forward to unprecedented levels. The luxury market is booming but with low inventory and rising prices, attaining that dream home can be a considerable feat.”
She said there were seven homes in Calgary which sold for more than $4 million last year compared with two in 2012.
Since 2009, luxury home sales in Calgary have increased by 115 per cent. Sales for each of the years were: 340 in 2009; 367 in 2010; 447 in 2011; 548 in 2012; and 732 in 2013.
Last year, Calgary had the highest ever sale for the city at $11.1 million for a home in the Crescent Heights neighbourhood.
Calgary had 10 consecutive months of new monthly records in 2013 with the exceptions of January and December. According to the Calgary Real Estate Board, so far this month until Sunday, there were 32 MLS sales over $1 million. The January monthly record was set in 2007 at 36.
Ann-Marie Lurie, CREB’s chief economist, said there has been some opportunity for people looking to upgrade in the housing market.

“As home values have been increasing for those people who are looking for the larger property, moving into something a little different, or upgrading essentially, they have some equity gains potentially in the other segments,” she said. “What’s interesting is that the price gains have been higher at the lower end of the market versus on the higher end of the market.
“Overall people who are doing that likely feel secure with their employment situation as well so they’re willing to make those types of moves. As we continue to see price increases, some of those homes that were at that margin are now pushing above the million-dollar price range. A lot of those newer builds that tend to come onto the resale market tend to be in that higher price point as well especially for single-family.”
The RE/MAX report said the condo sector in Calgary saw year-over-year luxury sales grow by 88 per cent from 36 units in 2012 to 68 in 2013.
“Along with traditionally popular, older, established inner core areas, newer areas such as Aspen are drawing purchasers,” it said. “Infill continues unabated, driving up values in neighbourhoods on the peripheral of the city’s blue chip areas, in pockets like Inglewood and Montgomery. The southwest is also on the rise. Strong confidence, based on sound economic fundamentals, is behind the growth in upper-end sales, along with steady trade-up activity, bolstered by equity gains, incomes, in-migration and immigration.”

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Calgary Tops Nation in Price Growth for Repeat Home Sales

 

Calgary tops nation in price growth for repeat home sales

Nationally, prices at record level

By Mario Toneguzzi, Calgary Herald January 14, 2014

 

 

Calgary led the country in the annual increase in prices for repeat home sales.

Photograph by: Ted Rhodes , Calgary Herald

CALGARY - Calgary had the best year-over-year growth rate in prices for repeat home sales in December, according to the latest Teranet-National Bank National Composite House Price Index released Tuesday.
It said Calgary’s annual increase was 6.5 per cent compared with the national composite, of 11 major centres surveyed, at 3.8 per cent as the country returned to a record high level.
The 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.
After Calgary, year-over-year increases were experienced in Vancouver (5.5 per cent), Toronto (4.9 per cent), Hamilton (3.7 per cent), Edmonton (3.6 per cent), Winnipeg (3.4 per cent), Quebec City (1.5 per cent), Ottawa-Gatineau (1.0 per cent) and Montreal and Halifax (0.4 per cent). Victoria prices were down from a year earlier for a 10th consecutive month (4.0 per cent).
Marc Pinsonneault, senior economist with the National Bank of Canada, said the index for Calgary is 171.67 which means prices have increased 71.7 per cent over June 2005. The index is only 1.3 per cent below the its highest ever level in September 2007.
“We still see sales at a very healthy pace going forward,” he said of the Calgary market, adding the forecast price increase in Calgary for 2014 is 3.4 per cent compared with 1.6 per cent nationally.
Ben Brunnen, an economic consultant in Calgary, said the city and provincial economies were among the top performing in Canada in 2013.
“As a result, we saw near record high interprovincial migration numbers which increased demand for living accommodation,” he said.
“Low vacancy rates and high rents in our city, in combination with low unemployment and good wages, have created the right economic conditions for increased housing sales.”
Pinsonneault said the index overall in December was up 0.1 per cent from November.
“With this advance the index has returned essentially to its all-time high of October,” he said.
“Although the composite index was up from the month before in three of the last four months of 2013, prices in all four of those months were down on the month in a majority of the 11 markets (eight in September, October and December, seven in November).”
The index on a monthly basis was led by increases in Edmonton and Vancouver (0.6 per cent) and Toronto (0.4 per cent). December prices were down from the month before in Winnipeg (0.1 per cent), Calgary and Ottawa-Gatineau (0.3 per cent), Quebec City (0.4 per cent), Montreal and Hamilton (0.6 per cent), Halifax (1.2 per cent) and Victoria (1.7 per cent).
It said Vancouver was the only market whose prices reached a new high in December and Toronto prices are almost back to their peak of last August.
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Calgary Resale House Price on the Rise

Calgary resale house prices on the rise

Low inventory, population growth and healthy economy drive increase

 

By Mario Toneguzzi, Calgary Herald January 9, 2014

                                                     

 

CALGARY - Inventory shortages, population growth and a healthy economy have driven price increases across all housing categories in Calgary in the past year, says the Royal LePage House Price Survey and Market Survey Forecast released Thursday.
The report said the Calgary market saw healthy price appreciation in all categories in the fourth quarter of 2013, with average prices for detached bungalows increasing 6.4 per cent year-over-year to $468,967 and standard two-storey homes increasing 6.1 per cent to $461,089. Standard condominiums saw the greatest price growth, rising 7.0 per cent to $269,778.
“Prices in the Calgary market have gone up across the board in the fourth quarter,” said Ted Zaharko, broker/owner for Royal LePage Foothills, in a statement. “There are three good reasons for this: a long-standing shortage of inventory, the steady influx of individuals to the area and the city’s healthy economy.”
Zaharko said there is a tremendous amount of pent-up demand from would-be buyers but there are not enough homes for sale in the city.
Royal LePage is predicting average prices will increase by 5.1 per cent in 2014 with sales to rise by 5.0 per cent.
At the national level, the report said year-over-year average price increases in the fourth quarter of 2013 were 3.6 per cent to $418,282 for standard two-storey homes and 3.8 per cent to $380,710 for detached bungalows, while the average price of a standard condominium rose 1.2 per cent to $246,530. Royal LePage is predicting prices to rise by 3.7 per cent this year across Canada.
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Booming Luxury Market Pushes Calgary House Prices to Records

Booming luxury market pushes Calgary house prices to records (with graphic)

Average sale and median prices at unprecedented levels

By Mario Toneguzzi, Calgary Herald January 2, 2014    

CALGARY - A booming luxury market, and tight overall conditions with listings not keeping pace with demand, has pushed Calgary house prices to unprecedented levels.
Average sale and median prices hit all-time records for the city in 2013 for both total MLS transactions and in the single-family home category, according to data released Thursday by the Calgary Real Estate Board.
The average sale price for total MLS reached $456,703 for the year, up 6.54 per cent from 2012, while the single-family average price rose by 7.61 per cent to $517,887.
The median sale price for total MLS was $401,000 and it was $450,000 for single-family homes. The median price rose by 5.53 per cent from the previous year for total MLS and it was a 7.14 per cent hike in the single-family market.
Also, December capped a solid year for the residential real estate market with the highest-ever monthly average sale price at $527,764, eclipsing the previous record of $526,546 set in June 2013.
"Momentum was building from the last quarter of 2012," said Christina Hagerty, a realtor with RE/MAX Realty Professionals in Calgary. "We approached 2013 with low interest rates, one of the lowest unemployment rates in the country and the lowest vacancy rate in the past decade. Employment growth and higher than expected net migration into the city helped support the demand for housing and increased sales and pricing. 2013 was an extremely busy year for us with informed and prepared purchasers.
"People talk about the flood adding to this, but I focus on the amazing ability for a city to rebound in a very short period of time. Something that may have devastated other major centres. I believe that this is largely due to the sense of community and the job market allowing people the ability to rebuild."
The previous records for average sale prices were set in 2012 at $428,649 for total MLS and $481,259 for single-family homes. The previous records for median prices were set in 2007 at $382,000 for total MLS and in both 2007 and 2012 at $420,000 for the single-family market.
Average prices in the city ballooned this year as a result of a strong luxury market that set a record for most transactions ever at $1 million or more.
devastated other major centres. I believe that this is largely due to the sense of community and the job market allowing people the ability to rebuild.”

Calgary single-family homes Calgary condo apartments Calgary condo townhouses | Create infographics

According to Mike Fotiou, associate broker with First Place Realty, there were 727 luxury home sales in 2013, which was a 33.6 per cent hike from the previous annual peak in 2012. The year was marked by 10 consecutive months of new monthly sales records. Only January and December did not set records in 2013.
Total MLS sales in the city reached 23,489 units in 2013, up 10.78 per cent from the previous year. New listings of 32,153 were up 0.97 per cent but active listings at the end of December were down by 17.80 per cent to 2,235.
"Companies are recruiting professionals across Canada and globally and this has put Calgary on the map as a thriving metropolis of opportunity and a safe place to raise their families," said Hagerty. "With vacancy rates at one per cent and an abundance of job opportunity, there is a confidence in the city. 2014 looks to continue with solid growth fueled by sound fundamentals."
MLS sales and percentage increase from 2012 for different housing categories were: single-family, 16,302, 7.92 per cent; condo apartment, 4,007, 14.45 per cent; condo townhouse, 3,180, 22.40 per cent; and towns, 4,516, 13.81 per cent.
Average sale price and percentage increase from 2012 were: single-family, $517,887, 7.61 per cent; condo apartment, $299,517, 5.17 per cent; condo townhouse, $341,116, 7.73 per cent; and towns, $381,884, 9.55 per cent.
Median price and percentage increase from 2012 were: single-family, $450,000, 7.14 per cent; condo apartment, $261,000, 3.78 per cent; condo townhouse, $306,000, 6.45 per cent; and towns, $355,700, 6.18 per cent.
Scott Bollinger, broker with the ComFree Commonsense Network, said prices in Calgary climbed because of increased sales and listings not keeping pace with the demand.
"Most notably in 2013 we saw rising wages, low interest rates and record in-migration. So it’s not surprising after three to five years of relatively little price growth, and despite the steady employment and the wage growth along with record low interest rates, that prices surged this year," he said.
"Add to that the Alberta and Calgary economies outperformed almost every other region in Canada in 2013 by a wide margin, which had the effect of attracting all of those people. But the interesting thing is that 70 per cent of the net migration to Calgary in particular was international. And the other thing about the migration was that we set a record this year for the growth of the cohort of ages between 25 and 45 and those people, along with the international crowd, are most likely to engage in household formation."
Bollinger said he is surprised that the listings didn’t catch up with the sales. He said the market might expect to see more of a reaction from the listing side early in the new year.
"If we don’t see that increase in listings, I think we’re going to continue to see farily significant price increases," said Bollinger.
In a statement, Ann-Marie Lurie, CREB’s chief economist, said sales growth exceeded expectations in 2013, pushing above long-term trends.
"Two consecutive years of elevated levels of net migration, combined with an improving job outlook and confidence surrounding long-term economic prospects, supported the demand growth," she said.
"In 2014, both sales activity and prices are expected to improve, but not at the same pace recorded this year. While factors influencing demand will support growth in 2014, rising listings and increased competition from the new home sector should alleviate some of the supply pressure in the market."
Those factors, combined with potential increases in long-term lending rates, should take some of the steam off the exceptionally strong price growth recorded in 2013, said Lurie. mtoneguzzi@calgaryherald.com
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