House price growth slowest in Calgary

Thu, 28 Oct by Georgina Burkholder

By Mario Toneguzzi, Calgary Herald October 28, 2010

 
 

House price growth in Calgary on a year-over-year basis was behind the rest of the country in August.

The Teranet-National Bank House Price Index, which regularly surveys six Canadian metropolitan areas, said that in August Calgary saw house price growth of only five per cent compared with a year ago. On a monthly basis, prices dropped by 0.5 per cent from July.

The index, which was released Wednesday, is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.

Toronto led the country with year-over-year price growth of 12.5 per cent followed by Vancouver (11.8 per cent), Ottawa (10.7 per cent), Montreal (7.7 per cent) and Halifax (6.8 per cent). The national average was 10.4 per cent.

In Canada, home prices are now 6.6 per cent above their pre-recession peak, a sharp contrast to the United States where prices are down 29 per cent from their peak four years ago, said Marc Pinsonneault, of National Bank Financial Group.

“Prices are likely to fluctuate without tendency over the next few years. At the national level, current market conditions, close to the boundary between balanced market and buyers’ market, herald a deceleration in home price deflation,” he said.

“Also, house prices are undoubtedly high, and affordability rests on historically low mortgage rates. People will realize that rates are due to go up sooner or later. When that happens, preference for renting instead of buying should increase. This should reduce the pressure on house prices.”

On a monthly basis, Ottawa led the nation with 1.4 per cent growth followed by Halifax (0.9 per cent), Montreal (0.5 per cent) and Toronto (0.4 per cent). Vancouver prices declined by 0.4 per cent. The national average was 0.2 per cent. It was the 16th consecutive month of gains.

“If the recent trend of growth in existing home sales and decline in the supply of homes listed on the market is maintained, it should keep a floor under home prices going forward,” said TD Bank Financial Group economist Shahrzad Mobasher Fard. “Prospects for any acceleration in price growth is, however, expected to be limited as factors such as the decelerating pace of the economy, high debt loads and weak growth in personal disposable income limit consumers’ propensity to spend.”

mtoneguzzi@calgaryherald.com

MLS home sales fall outside Calgary

Mon, 18 Oct by Georgina Burkholder

By Mario Toneguzzi, Calgary Herald October 7, 2010

The residential MLS market outside the city of Calgary experienced a sharp decline in sales in September compared with year-ago levels.

According to the Calgary Real Estate Board, sales in the towns outside the city fell by 33.42 per cent from September 2009 and sales in the country residential (acreage) market were down 50.5 per cent.

“In general, small towns and acreages, they’re all going to kind of take their cue from what’s going on in the city,” said Dan Sumner, economist with ATB Financial in Calgary. “The city’s going to lead the market and that’s going to slowly filter out into the smaller towns and into the countryside.”

In September, Calgary metro single-family MLS sales were down 23.79 per cent from a year ago, while condo sales were off by 36.9 per cent.

While volumes were down, CREB said there were 271 sales in the towns market in September for an average sale price of $363,507, up 2.45 per cent from $354,797 in September 2009.

In the country residential market, there were 50 sales for an average MLS price of $714,994, down 6.61 per cent from $765,605 a year ago.

Rural land sales also dropped by 45.16 per cent to 17 for the month for an average price of $425,241, down 20.57 per cent from the $535,347 in September 2009.

After the first eight months of this year, year-to-date sales in the towns market are down 5.53 per cent from the same period in 2009 and down by 7.1 per cent in the country residential market. However, they have increased by 11.49 per cent in the rural land market.

In Calgary metro, year-to-date sales in the single-family market are down 14.95 per cent from the same period in 2009 and condo sales are off by 13.1 per cent.

“While consumer confidence and job growth has improved, economic jitters will continue to impact Calgary’s housing marketing into the fall,” said CREB president Diane Scott. “More and more homebuyers will eventually return to the marketplace, but for the moment they remain moderately cautious. Fall sales should improve slightly, reflecting improved job creation — but immigration will be needed to fuel a sustained recovery in Calgary’s housing market.”

The Re/Max Market Trends Report Fall 2010, released earlier in the week, said the Calgary market is expected to remain steady going forward.

“Ultimately sales will remain off 2009 figures, but average price will level out and post a modest gain.”

Year-to-date average MLS sale prices and their percentage change from the same period last year are: single-family Calgary, $464,686, up 6.24 per cent; condo Calgary, $290,687, up 3.24 per cent; towns, $362,938, up 3.98 per cent; country residential, $832,834, up 8.76 per cent; and rural land, $404,989, down 6.61 per cent.

mtoneguzzi@calgaryherald.com

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