Calgary’s housing market grew twice as fast as expected in 2013, the result of what some realtors have dubbed a “perfect storm” of market factors.
Calgary Real Estate Board president Becky Walters said it’s unlikely 2014 will see the same kind of growth witnessed this year, when a combination of the June flood, a tight rental market, and an influx of newcomers to the city drove sales and prices higher.
As of Dec. 29, Calgary housing sales year-to-date were up more than 10 per cent from the year before. The average selling price was $456,686, up 6.5 per cent from 2012. “They were pretty much double what we had anticipated, and that was probably the biggest surprise to us this year,” Walters said.
Darren Abrahamson, a realtor with Royal LePage, said 2013 “hasn’t been what anybody expected.”
The June flood took an estimated 500 secondary suites off the market and forced more than 1,000 Albertans to seek temporary accommodation — driving down the rental vacancy rate and driving up the demand for homes to purchase.
A second surprise in 2013 was migration. In a report released early in the year, the Calgary Real Estate Board predicted a net increase of 15,000 new Calgarians this year. But the latest figures from the Canada Mortgage and Housing Commission show a projected net increase of 30,000 by the end of 2013. Those unexpected newcomers are adding to the tight rental market and driving home sales even higher.
“It was almost like the perfect storm, really,” Abrahamson said. “Everything just kept coming and taking away from the supply.”
Still, Calgary’s housing sales have not yet reached the heady levels of 2006 and 2007, when nearly every deal was met with multiple offers. That’s good, said Abrahamson, though he acknowledged affordability is becoming a concern for buyers.
“Even as a realtor, when you see first-time buyers spending $450,000 to $500,000 on a first home, you’re like, ‘This is nuts.’ But the thing is, our wages and salaries are a lot higher than other places in Canada,” he said. “So I don’t think the growth we’ve seen this year has been crazy.... And that’s good, because nobody wants to have crazy growth.”
The Calgary Real Estate Board expects sales growth to continue in 2014, but at a more sustainable rate — likely in the range of 3.5 per cent. Price growth is expected to increase 4.3 per cent.
“It is still very affordable in comparison to income levels, so we feel it is something we’ll be able to sustain,” Walters said. “The economy in general is so strong here.”
Earlier in December, BMO Economics called Calgary the strongest real estate market in the country, beating out Vancouver, Toronto and Montreal. The financial institution predicted a strong economy and further population growth will continue to drive a healthy Calgary housing market into the future.
Still, Abrahamson cautioned that the local real estate market is still hugely influenced by the energy sector. And he said housing prices could suffer if Alberta oil producers continue to struggle to get their landlocked bitumen to market.
Calgary Real Estate Board president Becky Walters said it’s unlikely 2014 will see the same kind of growth witnessed this year, when a combination of the June flood, a tight rental market, and an influx of newcomers to the city drove sales and prices higher.
As of Dec. 29, Calgary housing sales year-to-date were up more than 10 per cent from the year before. The average selling price was $456,686, up 6.5 per cent from 2012. “They were pretty much double what we had anticipated, and that was probably the biggest surprise to us this year,” Walters said.
Darren Abrahamson, a realtor with Royal LePage, said 2013 “hasn’t been what anybody expected.”
The June flood took an estimated 500 secondary suites off the market and forced more than 1,000 Albertans to seek temporary accommodation — driving down the rental vacancy rate and driving up the demand for homes to purchase.
A second surprise in 2013 was migration. In a report released early in the year, the Calgary Real Estate Board predicted a net increase of 15,000 new Calgarians this year. But the latest figures from the Canada Mortgage and Housing Commission show a projected net increase of 30,000 by the end of 2013. Those unexpected newcomers are adding to the tight rental market and driving home sales even higher.
“It was almost like the perfect storm, really,” Abrahamson said. “Everything just kept coming and taking away from the supply.”
Still, Calgary’s housing sales have not yet reached the heady levels of 2006 and 2007, when nearly every deal was met with multiple offers. That’s good, said Abrahamson, though he acknowledged affordability is becoming a concern for buyers.
“Even as a realtor, when you see first-time buyers spending $450,000 to $500,000 on a first home, you’re like, ‘This is nuts.’ But the thing is, our wages and salaries are a lot higher than other places in Canada,” he said. “So I don’t think the growth we’ve seen this year has been crazy.... And that’s good, because nobody wants to have crazy growth.”
The Calgary Real Estate Board expects sales growth to continue in 2014, but at a more sustainable rate — likely in the range of 3.5 per cent. Price growth is expected to increase 4.3 per cent.
“It is still very affordable in comparison to income levels, so we feel it is something we’ll be able to sustain,” Walters said. “The economy in general is so strong here.”
Earlier in December, BMO Economics called Calgary the strongest real estate market in the country, beating out Vancouver, Toronto and Montreal. The financial institution predicted a strong economy and further population growth will continue to drive a healthy Calgary housing market into the future.
Still, Abrahamson cautioned that the local real estate market is still hugely influenced by the energy sector. And he said housing prices could suffer if Alberta oil producers continue to struggle to get their landlocked bitumen to market.
“That’s why I think it really hinges on one of these (proposed) pipelines,” he said. “If one of these pipelines goes through, then things will continue. And I hate say it, but if none of these pipelines goes through, then in the next year or two I think we’re definitely going to have a problem.”
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