Prices remain stable compared to last year

Calgary, April2, 2018–As expected, slow sales this quarter have persisted through March in the City of Calgary. This is not a surprise, after stronger growth in sales at the end of last year following the announced changes to the lending market. First quarter sales totaled 3,423 units, nearly 18 per cent below last year’s levels and 24 per cent below long-term averages. Easing sales and modest gains in new listings caused inventories to rise and months of supply to remain above four months. “Economic conditions are slowly improving, but it has not been enough to outpace the current impact of higher lending rates and more stringent conditions,” said CREB® chief economist Ann-Marie Lurie.

“We are entering the most active quarters in the housing market with more inventory, which could create some price fluctuations. However, the improving economy is expected to prevent overall prices from slipping by significant amounts.”

While prices trended down on a quarterly basis, they remained relatively unchanged over last year’s levels due to modest gains in the detached sector offsetting declines in the apartment sector. The citywide benchmark price for detached product averaged $502,000 in the first quarter. This is slightly lower than the fourth quarter of last year, but comparable to levels recorded in the first quarter of last year. In March, the detached price reached $503,800, 3.6 per cent below pre-recession highs, but one per cent above the lows recorded during the recession.

“The market today is better than what we experienced at the peak of the recession,” said CREB® president Tom Westcott. “You can find good value if you’re looking to buy a home, and you can also get good value if you’re selling. Being well-informed, in any economic condition, is the key, because there are differences in the market depending on what type of property it is and where it is located.”

Detached market inventories in the first quarter of 2017 were low compared to historical standards. This year, detached inventories have averaged 2,573 units over the first quarter, 10 per cent below first quarter averages recorded during 2015 and 2016. Spring will have more inventory than last year, slowing progress on price recovery. However, the amount of price adjustment will vary depending on competing supply by location and product type.

HOUSING MARKET FACTS

• While detached benchmark prices eased by 0.25 per cent over the previous quarter, the quarterly decline was not consistent across all areas. Prices were stable in both the south and south east districts, while in the city centre, prices improved over the previous quarter.

• Despite the recent easing of new listings, the apartment condominium sector continues to struggle with excess supply in the resale, new-home and rental market. This is impacting prices. Condominium apartments averaged $256,567 in the first quarter, one per cent below the previous quarter and three per cent below levels recorded in the first quarter of 2017. Overall, monthly apartment prices are over 14 per cent below the highs recorded in 2014.

• Year-over-year, attached price changes have ranged from growth of four per cent to declines of 3.7 per cent depending on the sector of the city. Prices improved in the city centre, north west and south east districts of the city. However, those gains were offset by the losses in the north east, north, west, south and east districts. Attached benchmark prices averaged $328,533 in the first quarter and remain unchanged from levels recorded at this time last year.

• Activity within the attached sector continues to vary based on row product versus semi-detached. Semi-detached prices remained relatively stable compared to last year and last quarter, thanks to recent improvements in the city centre district. Meanwhile, row prices eased slightly over the previous quarter, with prices easing across all districts compared to the fourth quarter of 2017.

THE HOUSING MARKET IS EXPECTED TO CONTINUE MOVING TOWARDS RECOVERY IN 2018, BUT CHALLENGES REMAIN.

Housing market conditions are expected to remain relatively unchanged in 2018, as the impact of higher lending rates and stricter lending criteria are offset by modest improvements in the economic climate. Recent changes may have prolonged the recovery period in our market, but it is not expected to completely derail the transition. The path to recovery is expected to be bumpy, as the market adjusts to a new normal. We are entering 2018 with elevated supply levels and an environment of rising rates paired with stricter lending criteria. However, the improving economy generated modest job growth and net migration last year, with expectations of further improvements into 2018.

The opposing impacts of the changes in the lending environment and economic gains are expected to cause adjustments in demand/supply balances based on price range and product type, creating pockets of over/under supply and generating different paths of price recovery. Overall, it is expected to generate conditions comparable to 2017 and the dynamics within each sector of the market will vary.

Minimal changes in sales activity are expected to be met with easing new listings for some property types, limiting the upward pressure on supply. This should help support more balanced conditions, preventing widespread benchmark price declines. More balanced market conditions will be led by the attached and detached sectors of the market, while the apartment sector will continue to struggle with excess inventory in 2018. Prices will likely continue to face some downward pressure in the apartment sector, with stabilization not expected until the latter portion of the year.

The attached sector may benefit from changes in distribution, as some demand shifts from the detached sector to the attached sector of the market, supporting modest price gains of 0.38 per cent. Easing demand in the detached sector is expected to be met with easing listings, supporting overall stability in pricing.

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Both Calgary and Edmonton saw strong year-over-year increases in total dollar value of commercial property sales during the first half of 2017 as a result of the ongoing stabilization of the oil sector. In contrast, total dollar value of commercial real estate sales in Greater Vancouver declined by 37.5 per cent during the second quarter, indicating a return to market activity levels seen prior to 2016, which was a year of record-setting activity. Winnipeg’s commercial market remained strong with high demand across almost all property types, while Regina and Saskatoon slowed due to the ongoing downturn in the commodity sector.

With the worst of Alberta’s recession appearing to be over, the province’s two largest markets have seen strong commercial property investment in 2017. The total dollar value of commercial real estate sales in Calgary in the first half of the year was $1.43 billion, an increase of 55 per cent over the $932 million total in the first half of 2016. Alberta’s capital city also saw significant year-over-year growth in total sales value for commercial properties of 39 per cent, topping $1 billion at the mid-year point for the first time in three years.

In contrast to growth in Alberta, Greater Vancouver’s commercial property market slowed during the first half of 2017 after significant total dollar value and activity increases during the same period in 2016. There were 595 commercial property sales in the second quarter of 2017, compared with 875 sales during the same period last year. The slowdown in activity is due to a lack of supply across the market, limiting opportunities for investors. New development projects around the waterfront and BC Place are anticipated to alleviate some of the pent-up demand in Greater Vancouver in the coming years. Demand continues to be primarily driven by local investors, but there is also strong interest from offshore buyers from Europe, Asia and the United States.

 Virtually all commercial property types in Winnipeg are in high demand and investors view properties with passive income streams as most desirable. Continued low interest rates have fueled demand, and recent rate hikes from the Bank of Canada are unlikely to slow activity in the market as rates remain relatively low. Overall, the outlook for Winnipeg’s commercial property market for the remainder of 2017 and 2018 is positive, with strong anticipated demand moving forward.

Similarly, there is optimism in Regina and Saskatoon’s commercial markets despite slowed activity in 2017 due to the prolonged effects of the downturn of Saskatchewan’s resource sector. The positive outlook for 2018 is fueled by the stabilization of the oil sector and the potash industry showing signs of growth over the last few months combined with a variety of development projects currently underway in both cities.

The Calgary real estate market in early 2017 reflected a period of transition, influenced by economic conditions, changing buyer behavior, and evolving market trends. While signs of stabilization emerged after a prolonged downturn, challenges remained in certain property segments due to external economic factors.

Market Overview

Calgary’s housing market began the year with mixed results. Sales activity showed moderate improvement compared to the previous year, with a slight increase in buyer interest. However, inventory levels remained high, particularly in the detached and apartment condominium sectors, contributing to continued price adjustments.

Despite these challenges, market fundamentals signaled potential recovery, especially as employment conditions improved and consumer confidence gradually returned. However, affordability and lending policy changes continued to shape buyer decisions.

Sales and Inventory Trends

• Sales Volume: While home sales remained below long-term averages, there was a year-over-year increase, suggesting a more balanced market than in 2016.

• Inventory Levels: A surplus of available homes put downward pressure on prices, particularly in the apartment segment, where oversupply was most pronounced.

• Price Trends: Benchmark prices remained relatively stable but showed a slight decline in certain segments due to high inventory and cautious consumer spending.

Segment Performance

1. Detached Homes: The detached market saw signs of stabilization, with steady demand in mid-priced homes. However, high-end properties continued to experience slower turnover due to affordability concerns and shifting buyer preferences.

2. Apartment Condominiums: This sector faced the greatest challenges, with oversupply leading to prolonged market times and price declines. Buyer demand remained soft as affordability constraints and investor hesitation persisted.

3. Attached Homes: Townhouses and duplexes performed moderately, with balanced supply and demand dynamics. While prices remained stable, this segment benefited from buyers looking for affordable alternatives to detached homes.

Economic Influences

The market was shaped by broader economic conditions, including:

• Oil Prices and Employment: A gradual recovery in Alberta’s energy sector provided optimism, but job growth remained slow, impacting purchasing power.

• Mortgage Regulations: New federal mortgage stress tests affected buyer qualification, leading to shifts in market activity, particularly in the entry-level segments.

• Interest Rates: While rates remained low, expectations of future increases encouraged some buyers to enter the market sooner rather than later.

Market Outlook

Looking ahead, Calgary’s real estate market was expected to continue stabilizing, with gradual improvements in sales activity and demand. Price growth was anticipated to remain modest, with certain segments, particularly detached homes, faring better than others.

However, economic recovery, government policies, and lending conditions would continue to play a crucial role in shaping market performance throughout the year.

Conclusion

While Calgary’s real estate market in January 2017 showed early signs of recovery, challenges remained, particularly in inventory management and buyer affordability. The market was in a transitional phase, with potential for gradual improvement in the coming months. Sellers needed to remain competitive in pricing, while buyers had opportunities to enter the market under favorable conditions.

Calgary, Jan. 16, 2013 – The resale housing market in Calgary and area will see moderate sales and house price growth in 2013, CREB® said today at its annual forecast.

Sales growth in the city is expected to ease to 2.2 per cent this year, with house prices rising by 2.9 per cent.

“Slower growth trends in employment combined with lower migration estimates will impact sales growth across all resale sectors, and, as listings continue to decline, this will further dampen sales growth, particularly in the single-family market,” Ann-Marie Lurie, CREB®’s chief economist, said at the 2013 CREB® Forecast Conference & Tradeshow. “However, as the overall market remains well supplied, prices will continue to grow but not at the levels seen in 2012.”

In 2012, Calgary’s single-family market recorded sales growth of nearly 15 per cent. With a decline in the level of new single-family listings, that is expected to ease to 1.8 per cent this year. Prices are estimated to rise by three per cent.

Becky Walters, president of CREB®’s 2013 board of directors, said the city and surrounding areas are seeing good resale activity.

“We have a nice, balanced market, and it’s expected to see some growth this year,” Walters said. “Although some big markets in Canada are stumbling, Calgary is hot on the heels of a year of recovery, with the forecast saying the market is going to stay in positive territory.”

In the condominium market, sales are expected to increase by three per cent, with a moderate price appreciation of 2.4 per cent for condo apartments and 2.8 per cent for condo townhouses.

Although the prediction is for a “balanced” resale housing market, Lurie said there are numerous risks in the market.

“The largest risk in our market is related to concerns in the oil sector,” she said. “They are facing pipeline constraints and lack of access to more diverse markets, impacting the price they receive for their oil. If the discounts on our oil persist, this clearly could impact the job sector and, ultimately, the housing market.”

Calgary MLS sales and average prices so far in August are higher than the same time last year.

From August 1 to August 19, there have been 1,004 MLS transactions in the city, up 0.70 per cent from the same period last year and the average sale price has risen by 1.07 per cent to $412,456.

In the single-family sector, sales of 692 are down 2.54 per cent from last year but the average sale price of $468,133 is up 2.37 per cent.

In the condo apartment category, the sales of 172 are the same as August 2011 but the average price has jumped by 6.76 per cent to $275,172.

And in the condo townhouse sector, the average sale price has dipped by 6.99 per cent to $305,913 but sales have increased by 21.74 per cent to 140.

The Calgary real estate market showcased remarkable stability and growth in April 2005, setting new records for listings and sales through the Multiple Listing Service (MLS®).

A record-breaking 4,226 residential listings entered the market, up slightly from 4,165 in March 2005 and 4,109 in April 2004. This included 3,056 single-family homes, 1,118 condominiums, and 52 mobile homes. Year-to-date, 15,325 residential listings have been recorded, reflecting a strong market supply.

Residential sales also reached unprecedented levels, with 3,216 units sold in April 2005, marking a 24.07% increase over April 2004 and an 8.39% rise from March 2005. Sales comprised 2,358 single-family homes, 844 condominiums, and 14 mobile homes. Year-to-date sales totaled 10,013 units, up from 8,816 during the same period in 2004.

The average combined residential sale price in April 2005 was $249,331, a 13.27% increase from April 2004 but slightly below March’s $250,285. Year-to-date, the average price stood at $246,535, compared to $220,405 last year. Single-family homes averaged $274,126, condominiums $183,528, and mobile homes $40,157. The median combined residential price was $221,500, up 0.68% from March and 9.11% from April 2004.

Calgary’s thriving market reflects its robust economy, bolstered by low interest rates and healthy in-migration. According to Calgary Real Estate Board President Marilyn Jones, these factors are driving sustained market strength.

With 4,705 licensed brokers and agents across 257 broker offices, the Calgary Real Estate Board continues to support this dynamic and growing market.