Calgary a bright light among Canadian housing markets Best year-over-year sales and price growth in April
CALGARY — Calgary’s resale housing market continued to shine in April compared with the rest of the country as the city recorded the best year-over-year price growth and the biggest annual sales increase among major markets.
The Canadian Real Estate Association, in releasing its monthly MLS data on Wednesday, said Calgary saw sales of 3,003 for the month, a jump of 10.4 per cent and the association’s MLS Home Price Index, which surveys eight major markets in the country, showed Calgary leading the way with a 6.94 per cent year-over-year hike. The index tracks benchmark property sales.
“Many other areas in Canada are not experiencing the same level of growth in full-time employment, income, and migration as Calgary,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp. “These factors are key drivers of housing demand, and the growth in these areas is a reason why the resale market in Calgary has outperformed the national average.”
In Canada, overall sales dipped by 3.1 per cent to 47,997 in April and the aggregate benchmark price was up 2.22 per cent.
Douglas Porter, chief economist with BMO Capital Markets, said Calgary remains an outlier on the strong side. With one of the strongest job markets in the country and a sales/listings ratio above 64 per cent the picture remains quite positive for the Calgary market, he said.
Melanie Reuter, director of research for the Real Estate Investment Network, said Calgary’s real estate market is following the employment in the city.
“The creation of jobs in the oil and gas industry . . . is bringing people into the province and into the city,” she said.
“The influx of people puts pressure on housing, driving down vacancies which increases rents. The high rents often lead many renters to take the plunge into home ownership, diminishing the supply of homes. More demand and less supply means sellers can command higher prices. Residents can afford the higher home prices because wages continue to go up due to the competition for employees. Average weekly earnings in Alberta are the highest in the country.”
But Reuter said Alberta homes are reasonably priced compared with other provinces and cities.
“Barring some unforeseen circumstance that negatively impacts the provincial economy, we feel that real estate in Calgary will continue to do well,” she added.
The average MLS sale price in Calgary was up 3.6 per cent to $429,717 while new listings rose by 6.7 per cent to 4,664.
In Canada, the average sale price increased by 1.3 per cent to $380,588 and new listings rose by 5.6 per cent to 95,065.
For Alberta, sales were up by 5.0 per cent to 6,501; new listings rose by 5.0 per cent to 11,253; and the average price increased by 3.6 per cent to $378,892.
Sonya Gulati, senior economist with TD Economics, said we are continuing to see signs of a spring thaw in the Canadian housing market, an encouraging development especially heading into the all-important spring home-buying season.
“Just last month, home sales activity were down roughly 15 per cent, year-over-year. The same statistic this month is three per cent,” she said. “Price gains are also flirting with positive territory, albeit marginally above the zero threshold. As foreshadowed by our analysis, the impacts of the mortgage-rule induced slowdown are proving to be temporary.
“While there are signs of promise in the housing market, it is important to clarify expectations so everyone is on the same page. We do not anticipate a marked revival in the Canadian housing market in the months ahead. There simply is no economic impetus for a full-fledged comeback in the cards. In turn, the 2013 spring home-buying season should be mediocre at best.”
Porter said evidence continues to mount that the Canadian housing market seems to have pulled off the fabled soft landing.
He said surprises on the sales data in recent months have consistently been on the high side of expectations, not the low side.
“While some are highlighting the fact that prices are now rising at ‘their slowest pace since the 2009 recession’ the plain facts are that: a) they are still rising, and b) faster than inflation, and c) prices are at all-time highs. Some meltdown,” he said.