Calgary Luxury Home Sales Set Another Record in December

Calgary luxury home sales set another record in December

Mario Toneguzzi, Calgary HeraldMore from Mario Toneguzzi, Calgary Herald

Published on: December 29, 2014Last Updated: December 29, 2014 9:55 AM MST

Calgary’s luxury home sector continued to soar in December, setting another record in the resale MLS market, despite the recent collapse in energy prices.
According to Mike Fotiou, associate broker with First Place Realty, there were 40 MLS sales of over $1 million in Calgary as of December 28, eclipsing the previous December record of 39, established in 2012.
In 2014, every month set a new sales record for luxury home sales and June hit the all-time high of 104 transactions.
Fotiou’s data indicates that there have been 852 luxury home sales year-to-date as of December 28, up 17 per cent from the 2013 year-end total of 726, which was the previous annual record.
“The market for luxury homes has been so strong in Calgary in 2014 due to the lack of inventory of quality product therefore increasing demand, expansion of the energy sector into Calgary from other cities, and average prices of homes moving into the category of luxury homes. Average is now the new luxury,” said Rachelle Starnes, realtor with Royal LePage Foothills in Calgary. “The cost to build a new home in 2014 has escalated as well with many of the luxury builders being overloaded with renovations from the floods and the average length of time to move from conception to completion of a new home being between 18 months and 24 months.
“Our team feels this is one of the largest contributing factors to the record in sales for luxury homes whereby buyers are making the decision to buy versus build due to the cost of building far exceeding the value to purchase a resale luxury home that is move-in ready. The volatility of the market has also been incredible for the buyers in the luxury home market.  The more volatile the market, the more money is made every day on day trading.  The saying goes the rich get richer and we have seen a stable luxury market for over five years now with the changes in the economy virtually having very little impact on sales.”
According to the Calgary Real Estate Board, luxury home sales have been on an upward swing in the past few years. The number of sales in that market for each year: 2005, 138; 2006, 334; 2007, 458; 2008, 369; 2009, 337; 2010, 365; 2011, 446; 2012, 544; and 2013, 726.
“Calgary’s strong luxury real estate market this past year has primarily been driven by long-term confidence in our local economy and stability in our market.  With low interest rates and net migration still positive contributing factors, Calgary’s luxury market also benefited from a more balanced market this year. Even in December, a typically slower month in real estate, we continue to receive interest from qualified buyers in several of our high-end listings,” said Corinne Poffenroth and Wynn Alex Carr, realtors with Sotheby’s International Realty Canada, in a statement.
Ann-Marie Lurie, chief economist with CREB, said one of the reasons for the hike in sales in that sector is that overall housing price increases have pushed more homes into the luxury market category.
“It really is consistent with what we have seen over the past years. It represents a larger share of the market,” said Lurie.
“There’s also been improved listings in this area . . . This year it’s kind of showing just under four per cent of the market, that million-plus sector. So it is a shift up. Part of that has been due to the price increases. It’s also been due to the fact that we had fairly strong economic activity over the past several years. So we had strong net migration. We had employment growth. We had wage gains. All that contributed to that rise.”
The question mark is how the luxury market will respond in 2015, considering the recent dip in oil prices and the forecast slow down in the city’s economy next year.
mtoneguzzi@calgaryherald.com

Calgary Resale Housing Market Indicates a Healthy December

 

Calgary resale housing market indicates a healthy December

Mario Toneguzzi, Calgary HeraldMore from Mario Toneguzzi, Calgary Herald

Published on: December 18, 2014Last Updated: December 18, 2014 4:05 PM    

 

Calgary’s resale housing market was in ‘balanced’ territory in November as sales and prices dropped from the previous month, but it has rebounded this month with the pace of activity picking up.
In a report released Thursday, the Conference Board of Canada said the seasonally-adjusted rate of annual MLS sales in the city dropped 1.5 per cent from October to 35,292 units in November while listings rose by 5.1 per cent to 52,236.
The average price was also down by 0.4 per cent to $466,255.
So far in December, Calgary’s housing market continues to shine compared with December 2013.
“I’m not sure if the reality (of lower oil prices) has set in,” said Todd Hirsch, chief economist with ATB Financial. “Everyone’s watching these oil prices and it kind of means something to them on one level. But I think it will start to have a broader impact on the housing market in 2015 when we do start to see some of those layoffs coming. Some of those bonuses are going to be scaled back. All of the things where it really starts to affect people’s budget and even their ability to purchase homes.
“It just hasn’t shown up yet but I think it will.”
According to the Calgary Real Estate Board, month-to-date up to and including Wednesday, there have been 776 MLS sales in the city, up 2.78 per cent from the same period a year ago. New listings have risen by 42.75 per cent to 985 and active listings of 3,621 are up by 33.86 per cent.
The median price of $419,200 has increased by 4.93 per cent while the average sale price has risen by 5.15 per cent to $476,425.
The conference board report said the short-term year-over-year MLS price expectation for Calgary is in the range of a three to 4.9 per cent hike.
On a year-over-year basis compared with November 2013, sales were up by 11.2 per cent; listings rose by 21 per cent; and the average price increased by 3.8 per cent.
“The impact of economic shifts, such as the price of oil, take approximately six months to really be felt in the real estate market,” said Don Campbell, senior analyst with the Real Estate Investment Network.  “The current market numbers are a reflection of the in-migration we have witnessed over the last 12 months combined with a very low vacancy rate, pushing potential renters into the purchase market sooner than would normally occur.
“The on the street reality is that the higher end homes are having fewer showings than at this time last year, which signals a market that is being a bit more cautious. These fewer showings will lead to fewer sales in the new year, unless the oil price finds a stable bottom in the next couple of months.”
mtoneguzzi@calgaryherald.com

Alberta Price Growth Forecast to Lead Country

Alberta MLS sales expected to remain flat in 2015, but price growth forecast to lead country

Mario Toneguzzi, Calgary HeraldMore from Mario Toneguzzi, Calgary Herald

Published on: December 15, 2014Last Updated: December 15, 2014 10:05 AM MST

 

Sales volume in the Alberta housing market are expected to remain flat in 2015, but price growth will continue to lead the nation, according to a new report from the Canadian Real Estate Association.
According to the CREA’s resale housing forecast, MLS sales in the province are expected to rise just 0.1 per cent in 2015, after posting gains of more than nine per cent in each of the past two years. For Canada as a whole, the CREA upwardly revised its forecast, to 0.8 per cent growth.
While sales are expected to remain steady, however, price growth is still expected to be among the strongest in the country, at 1.9 per cent — sharing the lead with Manitoba. The national average is forecast to be 0.9 per cent.
“The big drop in oil prices will be a significant challenge for the Alberta housing market even as supply remains tight,” said Benjamin Reitzes, senior economist with BMO Capital Markets.
Also on Monday, the CREA released its MLS Home Price Index, which showed the Calgary market led the nation in price growth for the month of November. The CREA reported that for November, Calgary led Canada with an 8.5 per cent hike from a year ago. The aggregate of 12 major centres across the country was 5.2 per cent.
But the association’s chief economist, Gregory Klump, noted oil prices’ effects on the housing markets are “something of a wildcard at the moment.”
“It’s not clear how far oil prices may drop or for how long they’ll stay down,” he said. “How that plays may affect the outlook for interest rates, job growth, consumer confidence and sentiment about making major purchases.”
It is the third report in less than week showing the strength of Calgary’s housing market. Last week, the Teranet-National Bank Composite House Price Index, of repeat home sales, said Calgary prices were up 9.2 per cent year-over-year in November. Statistics Canada’s New Housing Price Index said prices for new homes in the city rose by 6.6 per cent in October from a year ago.
In November, Calgary reported MLS sales of 2,292, up 5.5 per cent from last year while they rose by three per cent in Alberta to 4,699 transactions and by 2.7 per cent across the country to 33,229.
The average MLS sale price in November rose by 5.7 per cent in Canada to $413,649. It was up by 3.8 per cent in Calgary to $462,031 and by 5.7 per cent in Alberta to $407,071.

Robert Kavcic, senior economist with BMO Capital Markets, said the slide in oil prices is going to take some, if not all, of the steam out of Calgary and Edmonton — and it may be doing so already.

“Sales in Calgary grew a tame 5.5 per cent year-over-year in November, while new listings jumped 15 per cent year-over-year,” he said. “Early-December results from the city are more glaring, with sales flat and new listings popping more than 35 per cent year-over-year.

“December is a slow month with a small sample, but that, combined with November’s result, is a decent hint that Calgary’s market could be rolling over.”

Jonathan Bendiner, economist with TD Economics, said the recent plunge in oil prices is likely to temper activity in housing next year.

Before the slide in oil prices, Calgary and Edmonton were considered front-runners in Canada’s housing market, he said. However, they are now expected to soften.

“Outside of these markets, a stable unemployment rate and still low interest rates will remain supportive of housing. That said, a change in sentiment regarding Canada’s economic prospects given the recent drop in oil prices may push some homebuyers onto the sidelines.”

CREA Sales forecasts

MLS Sales Growth
Canada: 5.1% in 2014 (481,300 total sales), 0.8% in 2015 (485,200 total sales)
Alberta: 8.3% in 2014 (72,200 total sales), 0.1% in 2015 (72,300 total sales)
MLS Price Growth
Canada: 6.0% in 2014 ($405,500 average price), 0.9% in 2015 ($409,300 average price)
Alberta: 5.2% in 2014 ($400,100 average price), 1.9% in 2015 ($407,900 average price)
mtoneguzzi@calgaryherald.com

Calgary House Prices Climb at Fastest Rate in Canada

Calgary house prices climb at fastest rate in Canada

Mario Toneguzzi, Calgary HeraldMore from Mario Toneguzzi, Calgary Herald

Published on: December 12, 2014Last Updated: December 12, 2014 3:46 PM MST

Calgary again posted the country’s biggest annual price growth for repeat home sales in November, the latest Teranet-National Bank house price index shows.
It found prices in the city rose 9.2 per cent from a year ago, compared with the national average of 5.2 per cent from the 11 major centres surveyed. Dwellings that have been sold at least twice are considered in the calculation of the index.
“Statistically this time of year has started to slow down, and we are still going strong,” said Tanya Eklund, a realtor with RE/MAX Real Estate (Central). “I do not believe we can sustain the large amount of inflation we have seen over the last two years.”
Calgary Real Estate Board data, through Wednesday, show 533 MLS sales for December, a 7 per cent increase from the same 2013 period.
The Teranet-National Bank report found four other centres — 7.3 per cent in Toronto, 7 per cent in Hamilton, 6.2 per cent in Edmonton and 5.9 per cent in Vancouver — also had annual price increases that exceeded the national average.
More moderate increases were seen in Winnipeg (1.5 per cent), Victoria (1.4 per cent) and Montreal (0.6 per cent). Prices were down in Ottawa-Gatineau (0.2 per cent), Quebec City (0.3 per cent) and Halifax (1.8 per cent).
On a monthly basis, the overall index was down 0.3 per cent from the previous month, the first monthly decline in a year.
“While home prices in Canada’s 11 major cities may have edged down slightly in November, they still remain quite elevated, hovering near record highs.  Moreover, while the decline was fairly broad based, prices in several key cities are well up from year-ago levels,” said Dina Ignjatovic, economist with TD Economics.
“Going forward, solid momentum in the job market over the past few months, combined with an ultra-low interest rate environment should continue to support the housing market in the near term.  However, as interest rates creep up in the latter half of next year and into 2016, affordability will erode, resulting in a moderation in home price growth.”
David Madani, economist with Capital Economics, said national house price inflation is easily outpacing growth in household incomes.
“Accordingly, this only adds to our concern about a housing bubble and a potentially severe market correction down the road,” he said.
“The slump in world oil prices will hit Western Canada hard, and it will only be a matter of months before housing activity and prices begin to fall significantly in Calgary.”
mtoneguzzi@calgaryherald.com
Twitter.com/MTone123

New Listings Jump 22% - Condo Sector Reports Year-to-Date MLS Sales Up 19%

New listings jump 22%

Condo sector reports year-to-date MLS sales up 19%

By Myke Thomas, Calgary Sun

First posted: Saturday, December 06, 2014 02:00 AM MST

 

After several years of declines, active MLS listings in the City of Calgary are on the rebound, according to the monthly report from the Calgary Real Estate Board (CREB).

New listings in November outpaced sales, resulting in a 22% increase in active listings but, even with the gain, listings remain below long-term averages, says Bill Kirk, CREB president.

“Over the past year, inventories have been low in the city, limiting some of the choice for consumers,” says Kirk. “While availability in specific segments and price ranges vary, on the whole, the recent rise in inventories will be welcome news for many buyers.”

Year-to-date sales in November recorded double-digit gains in all property types, with the strongest increase coming in the condominium sector, including apartments and townhomes, with a combined growth of more than 19%, putting both housing types at record levels, says Kirk.

“Overall, buyers looking for product under $400,000 will find more options in the condominium sector because supply levels have improved,” he says. “In the single-family sector, however, declining supply in that same price range has created much tighter market conditions in that segment.”

Single-family sales last month were down 1% from last November, although year-to-date sales are up 6% compared to the first 11 months in 2013.

New listings of single-family homes year to date increased 6%, accounting for easing growth in the single-family unadjusted benchmark price of $511,300 in November, a 9% increase over the previous year, but down from double-digit increases posted earlier in the year.

Unadjusted benchmark prices for condominium apartments and townhomes were $300,700 and $338,600, respectively, with both condominium sectors seeing price growth ease from double-digit levels.

“Tight market conditions earlier in the year caused significant aggregate price gains,” says CREB chief economist Ann-Marie Lurie. “It also resulted in a rise in new listings, supporting gains in inventory levels and a push towards more balanced levels. This has helped ease the upward growth pressure on prices.

“While Calgary’s price gains have garnered a significant amount of national attention, several indicators are pointing toward more stable conditions, easing risk associated with an overheating market.”

 

Calgary Resale Housing Market Prices and Sales Continue to Climb

Calgary resale housing market prices and sales continue to climb

Mario Toneguzzi, Calgary HeraldMore from Mario Toneguzzi, Calgary Herald

Published on: December 1, 2014Last Updated: December 2, 2014 8:12 AM MST   

 

Home sales stayed strong in November, rising 3.4 per cent from a year earlier, according to Calgary Real Estate Board data.
The median MLS sale price increased 5.3 per cent to $429,000, while the average sale price was up 6.1 per cent to $485,962, it said.
“It was a relatively strong month when we look at sales, listings, inventories. But definitely one that’s moderating,” said Ann-Marie Lurie, CREB’s chief economist. “We’re seeing a return to more balanced conditions and that’s easing some of the pressure on price growth, which is actually a good sign for Calgary’s market.”
In the single-family market, MLS sales last month dropped one per cent to 1,181 transactions, although the average price gained 8.7 per cent to $560,117. The median price rose by 5 per cent to $478,000. Condo apartment sales increased 6.9 per cent to 324. The median price was up by 7.4 per cent to $290,000 and the average price rose 4.9 per cent to $322,486.
Sales in the condo townhouse market increased 21.5 per cent, while the median price was up by 6.4 per cent to $331,000 and the average price rose by 0.7 per cent to $361,013.
Towns surrounding Calgary saw sales jump 15.5 per cent. The median price was up by 3.8 per cent to $383,000 but the average price dropped by 0.4 per cent to $391,155.