Calgary Resale Housing Market Poised for Record September

Calgary resale housing market poised for record September

On pace to break MLS sales peak of 2005

By Mario Toneguzzi, Calgary Herald September 22, 2014

 

CALGARY - Calgary’s resale housing market is on pace to break the record for MLS sales during the month of September - a peak that has been in place since 2005.
According to the Calgary Real Estate Board, month-to-date from September 1-21, there have been 1,500 sales in the city, which is up 11.61 per cent from the same period a year ago.
The September monthly record was established in 2005 with 2,197 transactions. Last year for the entire month of September there were 1,919 sales, which was the second best September on record.
“Whenever a market sees record growth one should ask what is going on behind the scenes to cause this? Many factors propel a strong real estate market,” said Tanya Eklund, realtor with RE/MAX Real Estate (Central) in Calgary. “Buyer confidence is influenced by low unemployment rates, continued low interest rates, low vacancy and high migration into Calgary all of which are driven by strength in the oil and gas sector. Calgarians are in a good place and are feeling confident in the real estate market.”
The average MLS sale price this month of $482,113 is up 5.73 per cent from a year ago while the median price has risen by 3.58 per cent to $420,000.
New listings in September have increased by 14.03 per cent to 2,390 while active listings as of Sunday were 4,785, up 16.37 per cent from last year.
“The dramatic population growth we experienced in 2013 is now being felt in the Calgary real estate market. It usually takes 18 months for the population growth to impact a real estate sales market, but due to the very low vacancy and the continued influx of new residents, this has pushed this to a much shorter time line,” said Don Campbell, senior analyst with the Real Estate Investment Network.
“Yes, the market will eventually slow when winter hits. However what we are witnessing here in Calgary . . . is a widening of the busiest months. It used to peak in April and May, but now due to the growth in jobs and population, the busy season is now encompassing April to October. A new trend has formed and real estate professionals must adjust their businesses accordingly.”
According to Mike Fotiou, associate broker with First Place Realty, overall September prices are at their highest September level ever.
Those prices are also being boosted by 49 luxury home sales so far this month, which surpasses every previous September month-end total except last year which set the peak at 59 transactions at the million-dollar plus level, said Fotiou.
After two straight months of year-over-year sales declines, the single-family market is poised to break the string this month as transactions so far are 962, up 1.69 per cent from a year ago. The average sale price of $564,017 has increased by 10.1 per cent and the median price has jumped by 6.94 per cent to $481,250.
In August, Calgary recorded its 17th consecutive month of year-over-year gain in MLS sales and 31st consecutive month of annual price hikes.
mtoneguzzi@calgaryherald.com
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Calgary's Prosperity Driving Demand for High-End Housing

Simply the best

by Cody Stuart on Sep 22, 2014

*CREB®Now real estate news luxury feature*

Calgary’s prosperity driving demand for high-end housing

While the final tally won’t be in for a few more months, it appears Calgary’s luxury homes market is on the verge of the best year in the city’s history.

According to CREB®, 611 homes priced at $1 million or more have sold through the first eight months of 2013. That number includes a record-setting 69 properties sold in August alone, which broke the previous record of 64 .

Set just last year, the all-time record for luxury sales in the city is 726. With four months left before the arrival of the new year, Calgary would need just 115 more sales – in a city averaging 76 a month – to break the record.

“Low lending rates, improving wages, rising prices and solid economic fundamentals have supported the growth in this segment of the market,” said CREB® chief economist Ann-Marie Lurie.

Another factor motivating the substantial rise in luxury sales in the city is the increasing number of homes surpassing the million-dollar mark.

“Sales price over $1 million have been representing a larger share of our market,” said Lurie. “Year-to-date, 611 million plus sales occurred within city limits, representing 3.3 per cent of total share of sales. On a year-to-date basis this represents a steady annual climb since 2009 when the share of sales dropped to 1.46 per cent.”

While Lurie also noted the majority of Calgary’s luxury MLS® homes up for grabs are the single-family market (90 per cent in August), the same prosperity has shown up in other sectors, as well. Highlighted by the announcement that Holt Renfrew would be adding a private “shopping apartment” to their downtown store, Calgary is quickly developing a reputation as a hot spot for luxury in Canada.

According to a report from Sotheby’s, over the first six months of 2014, Calgary’s 17 per cent increase in $1-million plus sales in Canada trailed only Vancouver and Toronto’s 34 per cent increase for the top spot in the country.

“Bolstered by the city’s thriving economy, the strength of its oil and gas sectors, low unemployment rates, high average net incomes and strong net migration, the market for high-end homes continued its upward trajectory with single-family home sales up 19 per cent and attached home sales up 21 per cent year-over-year,” said the report.

One area that saw a decline in luxury sales during the year was Calgary’s condo sector, where $1-million-plus sales dropped from 57 to 51 through the first eight months of 2014. Despite the decline, an upswing in the number of high-end condos under construction and slated for completion in Calgary means an increase could be in the cards in the coming months.

Highlighting the level of luxury found in Calgary’s resale condo sector, a $4.4-million penthouse in Eau Claire’s Princeton Hall earlier this year set the record for the priciest condominium ever sold in the city. Other high-end developments are also expected to come on steam soon, such as The River in Mission, Concorde and Waterfront in Eau Claire and Overture at Currie Barracks.

“What we here at Sotheby’s Calgary have noticed is the actual new segment of the ultra-luxury product – those family estates that are coming on the market,” said Mary-Ann Mears of Sotheby’s International Realty Canada.

“Why? Calgary is a wonderful city and we’re attracting top ranking executives [from] across the country. We have seen a lot of international influence coming to Calgary. All the key factors are there.”

Earlier this year, a 64-hectare property in the Calgary area was listed for a record $30 million. The property, which contains an 11,000 square-foot home along with a 3,800 square-foot guest house was actually one of a pair of listings that cracked the $30-million mark. Kettle Lake Ranch – a 98-hectare property near Priddis containing two houses, a barn, a hay storage building, a gas station and staff accommodations – was listed for the princely sum of $37.8 million.

- See more at: http://www.crebnow.com/simply-the-best/#sthash.DzPeXuO3.dpuf

Calgary resale housing price growth highest in Canada

National sales highest since January 2010

By Mario Toneguzzi, Calgary Herald September 15, 2014 12:06 PM

 

Calgary’s resale housing has the best annual price growth in the country.

Sales in Canada's resale housing market are approaching pre-recession highs seen in 2007, while rising prices in Calgary continue to outpace the nation - prompting an economist to warn the country's hottest markets may be susceptible to a "shock."

The Canadian Real Estate Association reported Monday that sales in August were up 1.8 per cent month over month, due to strong sales in major centres. It was the seventh consecutive month of growth for the country's housing market.

“Although activity rose in fewer than half of all local housing markets in August, the national tally was fuelled by monthly sales increases in Greater Vancouver, Calgary and Greater Toronto,” said CREA.

Sales rose the most in Vancouver, up 10.3 per cent, at 2,820 units. Calgary sales were up 5.2 per cent, at 2,976 units. CREA's data for Calgary includes the city's surrounding areas.

Doug Porter, chief economist with BMO Capital Markets, said the overall level of sales in Canada is closing in on the pre-recession highs reached in 2007.

He said markets are balanced in most regions, but Alberta is an exception, “where sellers retain the upper hand over the ongoing tide of newcomers to the province.”

“Canada’s housing market remains healthy and well balanced overall, albeit with sizeable disparities across regions. The major potential flashpoint is that prices in the three hottest cities — Calgary, Toronto and Vancouver — are rising faster than family income, further straining affordability,” he said. “The continued rapid price gains in these cities will increase their vulnerability to a shock — whether economic, interest rate, or something else.

“The persistent strength in these cities is no doubt what prompted the Bank of Canada to stop talking about the inevitably of a soft landing for Canadian housing, and to suggest that the sector has been stronger than they expected. But we would reinforce the message that talk about the hot housing market is really only a three-city story.”

The CREA reported Monday that Calgary's annual price growth of 9.83 per cent in the MLS Home Price Index was much steeper than the national aggregate of 5.33 per cent.

Gregory Klump, CREA’s chief economist, said listings and sales this spring were deferred due to unseasonably harsh weather, which subsequently supported activity once the delayed spring homebuying season got into gear.

“This trend was reinforced by a decline in mortgage interest rates,” he said.

“The boost from deferred sales is still expected to prove transitory. While national activity has yet to cool, sales were down from the previous month in the majority of Canada’s local markets, which may be early evidence that the transitory boost is fading. That said, low interest rates will continue to support housing affordability and sales activity.”

The national average price for homes sold in August was $398,618, up 5.3 per cent from the same month last year while the average in Calgary rose by 5.2 per cent to $454,994.

In Alberta, the average price rose by 4.2 per cent to $397,701 as sales were 3.8 per cent higher to 6,354 transactions.

A report by TD Economics said the obvious risk with a housing boom is that it may be fueled by unsustainable increases in debt. Despite rising housing activity, mortgage credit growth remains modest. This is largely a function of households paying back principal more aggressively than in the past, as well as moderation in home equity withdrawals, it said.

“There is, however, clear cause for caution. While households have moderated their credit growth, household debt remains near record highs,” wrote Brian DePratto, economist with TD Economics. “The ratio of household debt to disposable income reached 163.6 per cent in the second quarter, near the peak of 164.1 per cent seen in (third quarter of 2013).

“To sum up the current state of the housing market and household finances, it would appear that the party is still going, but households are nearing their limit. Real risks exist that bear close monitoring. Interest rates remain low, and their lure may prove too strong for households, fuelling a further acceleration in household debt. At the same time, net worth has been buoyed by gains in house prices, and a dramatic slowing, or even decline, in prices would have a damaging effect on net worth.”

The report said the housing party is likely to wind down in an orderly fashion. Rates can’t remain low forever, and TD expects a gradual rise as we approach 2015, leading to a natural deceleration in the demand for housing.

In an updated forecast also released Monday, CREA said sales nationally will reach 475,000 units in 2014, representing an annual increase of 3.8 per cent. Sales are expected to dip by 0.4 per cent in 2015 to 473,100 units.

CREA is forecasting Alberta sales to jump by 7.7 per cent to 71,200 transactions and 1.0 per cent to 71,900 units.

The average sale price in Alberta is forecast to rise by 5.0 per cent this year to $400,200 and by another 1.9 per cent next year to $408,000 while nationally the price will increase 5.9 per cent this year to $405,000 and by 0.7 per cent in 2015 to $407,900.

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Calgary Resale Housing Market on Pace to Eclipse $11.3B Sales Record

Calgary resale housing market on pace to eclipse $11.3B sales record

 

By Mario Toneguzzi, Calgary Herald September 9, 2014 9:35 AM

                                                                     

CALGARY - Calgary’s resale housing market is on pace to set a record for total dollar volume in MLS sales in a year, eclipsing the $11.3 billion peak established during the housing boom of 2007.

Year-to-date until the end of August, there have been 18,521 transactions at an average sale price of $482,185 for a total dollar volume of $8.9 billion, according to the Calgary Real Estate Board. Last year, during the same period, there were 16,712 sales with an average price of $456,629 and a total dollar volume of $7.6 billion.
During the record year of 2007, there were 26,611 total sales all year with an average sale price of $423,770. Last year was the second highest dollar volume on record at $10.7 billion with 23,474 sales and an average sale price of $456,595.
Julie Dempsey, a realtor with Sotheby’s International Realty Canada, said the number of new people moving to Calgary is the main factor behind such strong sales activity in the city and the continued elevation of prices.
“The listings that I am currently working on have a common theme: they are owned by savvy investors who see the strength in Calgary’s market and they are choosing to cash in,” said Dempsey.
Average sale prices in Calgary have jumped by more than $225,000 since 2005.
Calgary’s latest housing boom is being fuelled by net migration. According to Canada Mortgage and Housing Corp., net migration to the Calgary census metropolitan area was 45,168 in 2013 and 31,996 in 2012. During the housing boom of 2006-2007, net migration peaked at 25,120 in 2006.
“The higher dollar volume is a reflection of the composition of sales,” said Ann-Marie Lurie, CREB’s chief economist. “When we look at what at this year compared to 2007, of all residential sales activity a greater share of the sales have been occurring in the $500,000 plus price ranges. Meanwhile, the share of sales has dropped for the under $400,000 sales.
“With a greater number of sales occurring in the higher price ranges, it is not a surprise that the dollar volume of sales has increased at a faster pace than the growth in number of transactions.”
mtoneguzzi@calgaryherald.com
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Calgary Luxury Homes Sales on Record Pace

Calgary luxury home sales on record pace

Every month this year has set a new peak for MLS transactions

By Mario Toneguzzi, Calgary Herald September 4, 2014                            

 

CALGARY - The appetite for luxury homes in Calgary continues to be very strong as another MLS sales record was established in August.
According to the Calgary Real Estate Board, there were 69 properties that sold for $1-million or more during the month, eclipsing the previous monthly high of 64 set last year.
Each month this year has established a record for luxury home sales.
Year-to-date, there have been 611 luxury home sales until the end of August compared with 522 for the same period last year. The all-time peak for annual sales at the $1-million plus level was in 2013 with 726 MLS transactions.
“Bolstered by the city’s thriving economy, the strength of its oil and gas sectors, low unemployment rates, high average net incomes and strong net migration, the market for high-end homes continued its upward trajectory with single-family home sales up 19 per cent and attached home sales up 21 per cent year-over-year,” said Sotheby’s International Realty Canada’s Top-Tier Real Estate Report for the first half of the year, which was released on Thursday.
“Due to limited inventory in Calgary’s condo market, sales decreased 25 per cent compared to the same time last year. With a number of new high-end condo projects recently announced in Calgary’s downtown core, it is expected that the volume of luxury condo sales above $1 million will increase in the second half of 2014.”
Ross McCredie, president and chief executive of Sotheby’s International Realty Canada, said the Calgary housing market is still relatively inexpensive for many people who have moved to the city from other parts of Canada.
“There’s a ton of different factors (to the luxury home boom) but overall there’s a ton of confidence,” he said.
“Low interest rates, a lot of confidence specifically in Calgary where you have a lot of investment, very, very low unemployment and you have huge demand for jobs . . . Overall we don’t see anything that’s going to change in the horizon right now for us.”
The Sotheby’s report said low inventory in the beginning of the year drove bidding wars and price increases in a market that favoured sellers.
“Over the summer months, new inventory over $1 million emerged to meet strong consumer demand, particularly in the condominium market, a trend which is expected to continue into the fall,” it said. “At the same time, Calgary’s robust economy is expected to sustain demand for luxury real estate, and notable growth is expected in the $4 million single-family home market throughout the fall and into 2015 as this category has already outpaced 2013 sales numbers.”
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Single-family Sales Down, but Housting Prices Continue to Climb in Calgary

 

Single-family sales down, but housing prices continue to climb in Calgary

Second highest level of sales ever for the month

By Mario Toneguzzi, Calgary Herald September 2, 2014 1:37 PM

Prices and activity continue to climb in Calgary’s resale housing market.

CALGARY - Calgary’s hot resale housing market showed no signs of cooling off in August as sales and prices continued to climb.
According to the Calgary Real Estate Board, August was the 17th consecutive month of year-over-year gains in MLS sales and the 31st consecutive month of year-over-year annual price growth.
There were 2,267 sales in August, up 3.42 per cent from last year. The median price rose by 6.02 per cent to $423,000 and the average sale price increased by 5.27 per cent to $477,783. New listings were up by 13.6 per cent to 3,150 and active listings at the end of the month climbed by 17.91 per cent to 4,596.
The benchmark price, which CREB says is the cost of a typical home, was up 10.18 per cent to $459,800.
Total sales were the second highest ever for August behind only the 2,326 sales level set in August 2005.
Calgary sales this month were buoyed by strong activity in the condo market as single-famly home sales actually dropped from a year ago. The single-family market saw activity decline by 2.38 per cent to 1,477 sales but the median price rose by 6.47 per cent to $479,000 while the average price was up by 5.42 per cent to $545,238. The benchmark price rose by 10.24 per cent to $512,300.
“Sales activity has continued to improve but it’s due to the condo sector,” said Ann-Marie Lurie, CREB’s chief economist.
It was the second consecutive month that single-family sales have declined year-over-year.
“This is all coming down to the affordability of product. This has been a trend that we’ve continued to see happen. With less and less product being available in the single-family price range at that lower end (below $400,000) we’ve seen that pick up in demand in the condo side,” said Lurie, adding the decline in single-family sales is taking place in the lower end of that market while sales above that price point have risen.
Lurie said more than 76 per cent of new condo listings are priced below $400,000 and represent more than 68 per cent of the total inventory within city limits.
Sales for condo apartments were up by 13.85 per cent to 452 units as the median price rose by 10.58 per cent to $287,500 and the average price was up by 11.48 per cent to $332,006. The benchmark price increased by 10.2 per cent to $298,200.
In the condo townhouse sector, sales increased by 19.86 per cent to 338 units as the median price jumped by 9.86 per cent to $339,894 and the average price rose by 13.27 per cent to $377,958. The benchmark price of $328,300 was up by 9.98 per cent.
The market that includes towns outside the city also saw a spike in activity with sales up 12.3 per cent to 484. The median price grew by 5.34 per cent to $375,000 while the average price was up by 7.29 per cent to $391,595. The benchmark price rose by 7.9 per cent to $375,600.
“Sales activity is still strong relative to long-term averages,” said Lurie. “And prices are still improving. Listings are increasing. So with inventory rising as it pushes to more balanced levels, we’re seeing prices start to level off. This is what we would expect . . . But we’re still going to see strong year-over-year price gains.”
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