Fear of rate hike sparks Calgary housing sales

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from Calgary Herald March 30, 2010 7:00 AM

CALGARY -Talk of rising mortgage rates has motivated buyers to take the plunge in March into home ownership, with preliminary data showing MLS sales are up considerably from a year ago — and average prices are following the upswing.

“Nothing has really happened in the Calgary real estate market for the past two years and now there’s an increase in confidence in the buyer market,” said Tamara Pilipchuk, a realtor with Re/ Max House of Real Estate.

“What’s driving the Calgary real estate market right now is the aff ordability of the housing market. It doesn’t matter what community you’re in, first-time homebuyers and move-up buyers are really deciding that now is the time to take advantage of interest rates because it’s not going to last.”

On Monday, Royal Bank of Canada, Laurentian Bank and TD Canada Trust announced they were raising rates on certain fixed mortgages, including the benchmark five-year closed rate, which jumps 60 basis points to 5.85 per cent, effective today.

“It’s probably an early sign of what we’re going to see in the next few months and further down the road, when the Bank of Canada starts tightening,” said BMO Capital Markets economist Robert Kavcic. “It’s the beginning of an upward trend.”

As of Sunday, according to the website of Mike Fotiou, of First Place Realty, MLS sales in the single-family market in Calgary were 1,252 month-to-date, with an average price of $469,859. Sales are up by more than 15 per cent from March 2009 and the average price is up nearly $50,000, or 12 per cent from last year.

In the condominium market so far this month, MLS sales were 537 for an average price of $298,019. Sales have increased by more than 20 per cent from a year ago and the average price is up almost five per cent.

If the average prices hold in the remaining days of this month, they would represent the highest monthly average since June 2008.

“Even in February, we saw a definite increase in competing offers as people started to realize that now is the time to capitalize if they’re going to make such a move,” said Pilipchuk. “We’re having our spring market right now, definitely, as people are fearful that interest rates are going to rise.”

MLS sales and prices have also risen so far this month compared with February’s activity.

Last month, there were 1,035 single-family home sales for an average price of $458,254, while the condo market saw 536 sales at an average $282,880.

“It’s all consumer confidence. End of 2008, 2009, everyone thought the sky may fall and we may follow into the footsteps of the U.S. Alberta’s economy is a little bit different from that and people realize we’re not spiralling down into doom and gloom,” said Pilipchuk.

Richard Cho, senior market analyst in Calgary for Canada Housing and Mortgage Corp., said sales in the local residential market continue to outperform last year’s levels.

“Sales continue to be supported by improvements in economic and employment conditions, rising home values and historically low mortgage rates,” he said.

Also, the prospect of interest rates rising later this year has forced some potential buyers to make purchases earlier than planned, added Cho.

According to Fotiou’s preliminary data, the median sale price of a single-family home so far this month is $422,250, up from $411,000 in February and $375,000 a year ago. For condos, it’s $275,000, up from $265,900 last month and $260,000 a year ago.

As of Monday, the Calgary Real Estate Board, on its website, showed active listings of 4,047 for single-family homes and 2,173 for condos. The month-end inventory of listings in March 2009 was 4,369 for single-family homes and 2,052 for condos.

RBC, TD raise mortgage rates

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from the Financial Post – March 29, 2010 9:02 AM

Royal Bank, Canada’s largest bank, said Monday it is raising rates it charges on certain fixed mortgages, including the benchmark five-year mortgage. Mortgage rates are on the upswing in Canada, with both Royal Bank and TD Canada Trust raising rates they charge on certain fixed mortgages, including the benchmark five-year mortgage.Five-year closed mortgages jump 60 percentage points to 5.85 per cent effective Tuesday, the banks said in separate statement Monday.Four-year term closed mortgages rise by 0.40 percentage points to 5.34 per cent,Royal’s three-year product rises by 0.20 percentage points to 4.35 per cent, while at Canada Trust it gains 40 percentage points to 4.70 per cent.

5% to 7% increase in Home and Condo Prices Predicted for upcoming year

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Calgary Herald – March 19,2010

CALGARY – A report by the Conference Board of Canada today says the short-term year-over-year price growth expectation for Calgary’s resale housing market is in the five per cent to seven per cent range.

The board’s report said Calgary’s market is considered in the balanced territory.

In February, the average MLS sale price for single-family homes in the city was $458,254 while for condos it was $282,880.

The board’s expectation for Edmonton was a seven per cent and up price growth.

mtoneguzzi@theherald.canwest.com
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Calgary Housing Market Shows Signs of Balance, not Bubble

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Calgary, March 1, 2010 – Calgary’s housing market continues to build stability and momentum in the second month of the year, according to figures released today by the Calgary Real Estate Board (CREB®).

The number of single family homes sold in February 2010 in the city of Calgary was up 25 per cent from the same time a year ago, while condominium sales saw an increase of 56 per cent from the same time a year ago.

February 2010 saw 1,035 single family homes sold in the city of Calgary. This is an increase of 36 per cent from 762 sales in January 2010. In February 2009, single family home sales totaled 825. The number of condominium sales for the month of February 2010 was 536. This was an increase of 43 per cent from the 376 condominium transactions recorded in January 2010. In February 2009, condominium sales were 343.

“There is a spring in the step of Calgary homebuyers as we get ready for the spring market,” says Diane Scott, president of CREB®.  “Indeed, the Calgary housing market has shifted from fragile to fervent in just over 12 months.  C.”

“The market is tightening and we are seeing a moderate rise in the number of competing offers on homes,” Scott acknowledges. “But Calgary’s market remains in a healthy and stable position. There has been much talk of a housing bubble in some markets across Canada but we believe balance, not bubble, is the story of the Calgary housing market for 2010.”

The average price of a single family home in the city of Calgary in February 2010 was $458,254, showing an increase of 4 per cent from January 2010, when the average price was $441,217, and showing an increase of 10 per cent from February 2009, when the average price was $415,568. The average price of a condominium in the city of Calgary was $282,880, showing no significant change from January 2010, when the average price was $282,639 and a 5 per cent increase over last year, when the average price was $268,971. Average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods, or account for price differentials between geographical areas.

The median price of a single family home in the city of Calgary for February 2010 was $411,000, showing a 3 per cent increase from January 2010, when the median price was $398,000, and a 10 per cent increase from February 2009, when the median price was $375,000. The median price of a condominium in February 2010 was $265,900, remaining nearly the same as in January 2010, when the median was $265,000. That’s up 6 per cent from February 2009, when the median price was $249,900.

All city of Calgary MLS® statistics include properties listed and sold only within Calgary’s city limits. The median price is the price that is midway between the least expensive and most expensive home sold in an area during a given period of time. During that time, half the buyers bought homes that cost more than the median price and half bought homes for less than the median price.

“Affordability continues to drive the market and many first time home buyers are seeing this as the time to take advantage of record low interest rates,” says Scott.  “The spring market will continue to see strong demand for affordable single family homes by first time home buyers and young families looking to move up.”

“We will see a rise in both our inventory and demand this spring—and we expect both to stay in a healthy balance.  Prices will edge up as the year progresses, but the rise in prices will be moderate,” adds Scott.

Single family listings in the city of Calgary added for the month of February totaled 2,154, an increase of 18 per cent from January 2010 when 1,822 new listings were added, and showing an increase of 5 per cent from February 2009, when 2,057 new listings came to the market. Condominium new listings in the city of Calgary added for February 2010 were 1,109, up 17 per cent from January 2010, when the MLS® saw 951 condo listings coming to the market. This is an increase of 24 per cent from February 2009, when new condominium listings added were 892.

“The story of the housing market is all about interest rates at the moment,” says Scott. “When the rates will rise is the wild card. Canada’s economic recovery showed marked improvement in the final quarter of last year.  This will put pressure on the Bank of Canada to begin raising rates sooner than planned to curb inflation.”