Calgary to face ‘very active’ spring housing market as economy improves

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CALGARY – Calgary will experience a “very active” spring housing market as an improved economic outlook combined with record low interest rates and affordable housing are “fuelling recovery” in residential real estate sales, says a report released today by Re/Max.

The supply of detached homes is beginning to tighten, with multiple offers becoming more prevalent in hot pockets throughout the city, particularly well-priced, entry-level product,” said the Re/Max Market Trends Report 2010.

“First-time buyers continue to drive the market, looking to take advantage of greater affordability before the window of opportunity closes.”

The report said that while the average price is still off peak 2007 levels it continues its ascent rising seven per cent in the single-family category to $441,217 and four per cent in the condo category to $282,639 over January 2009 levels.

“There has been a notable push by purchasers to get in before predicted interest rate hikes and tighter lending criteria,” said the report. “To that end, buyers are being more cautious in their pursuits, deliberately choosing not to max out debt service ratios, with a trend towards more modest pursuits that can be afforded. The market is picking up at all levels, with move-up buyers increasingly active.”

The Re/Max report, which looked at 16 markets across the country, noticed a sharp decline in active listings. A lack of inventory will be the greatest challenge facing housing markets across Canada this spring, it said.

That, combined with the threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario the introduction of the new Harmonized Sales Tax, have clearly served to kick-start real estate activity “prompting an unprecedented influx of purchasers.”

“Affordability is the catalyst for the vast majority of purchasers in today’s housing market,” said Elton Ash, regional executive vice president for Re/Max of Western Canada. “While homeownership is still within reach in many major centres, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now.”

Ash said the real estate market has experienced a 180-degree turnaround from this time last year.

“It’s clear that real estate from coast to coast has roared back to life and markets are once again firing on all cylinders,” said Ash. “The vast majority of markets are now recovered.”

mtoneguzzi@theherald.canwest.com

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Canadian home prices gain for sixth month – Calgary market up 0.8 per cent in October

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Calgary Herald – January 30, 2009

OTTAWA — Resale prices for Canadian homes rose for a sixth consecutive month in October — and were up on an annual basis for the first time in nearly a year — as the country’s real estate market continued to recover from recessionary lows, according to a report released Wednesday.

The Teranet-National Bank resale house price index of major markets increased 1.27 per cent during the month from September. Year-over-year, prices were up 0.57 per cent — marking the first rise in 10 months.

“Prices have now risen one per cent or more for five months in a row,” said Marc Pinsonneault, senior economist at National Bank Financial. “In October, however, the monthly rise varied significantly among the six metropolitan markets surveyed.”

The biggest monthly price gains were recorded in Toronto (1.6 per cent), Vancouver (1.8 per cent) and Calgary (0.8 per cent), the index showed.

More modest increases were noted in Halifax (0.4 per cent), Ottawa (0.3 per cent) and Montreal (0.3 per cent). “In each of these three cities, the monthly appreciation was the smallest since market bottom — except for one monthly decline each in Montreal and Halifax,” said Pinsonneault.

Vancouver prices, however, remain 4.1 per cent below their peak of June 2008, while Calgary is still down 11.3 per cent from the high reached in August 2007.

Millan Mulraine, economics strategist at TD Securities, said that “while the pickup in this indicator is not entirely surprising, the slow turnaround in the indicator appears to be at odds with the other Canadian home price measures (which show a more profound uptick in Canadian home prices) and the recent sharp upswing in housing market activity.”

The Teranet-National Bank price index is based on homes that have sold at least twice. The survey does not provide specific sales figures.

www.calgaryherald.com