CALGARY — While Canada’s resale housing market was showing signs of a correction in August, Calgary’s real estate story was telling another tale.
National sales during the month were the biggest year-over-year drop since April 2011, but Calgary experienced the highest annual rate of sales growth among major centres in the country and it recorded the best price growth in Canada in an index that tracks price trends in the country’s major markets, according to the Canadian Real Estate Association. Ann-Marie Lurie, the Calgary Real Estate Board’s chief economist, said the city’s housing market has been buoyed by positive economic markers such as employment growth, economic growth and positive migration. Consumer confidence has also contributed to positive sales growth in real estate.
But Calgary’s housing market was slow to recover from the recession, has recently been picking up steam and it still has a way to go to catch up to the peak pricing of a few years ago, she said.
“Eventhough there’s growth, we’re not at typical levels of activity,” added Lurie. “We’re just returning there.” In August, Calgary’s MLS sales reached 2,198, a 15.3 per cent hike from a year ago. In contrast, Canadian sales activity dipped by 8.9 per cent from last year to 36,235 transactions.
David Madani, Canada Economist with Capital Economics, said the recent slump in home sales at the national level suggests that a housing correction is underway. “Assuming that sales continue to trend lower over the remainder of this year, then the typical lag relationship between sales and prices indicates that house prices will eventually follow suit early next year,” he said. “We still think that house prices will decline by 25 per cent over the next year or two.
“Slumping home sales . . . suggests that the willingness of potential home buyers to pay seller’s astronomically high asking prices may be withering.” New listings of 3,399 in Calgary were down 11.0 per cent from a year ago while they fell by 6.7 per cent nationally to 68,762. In Calgary, the average MLS sale price was $400,277, up 1.5 per cent. Nationally, the average price rose by 0.3 per cent to $350,192.
Calgary led the year-over-year rise in the index at 6.51 per cent. The national aggregate was a 4.03 per cent hike.
In Alberta, MLS sales of 5,198 in August were up 5.3 per cent from last year; new listings fell by 12.5 per cent to 8,472; and the average sale price rose by 3.5 per cent to $356,488. “While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction,” said Wayne Moen, president of CREA, of the national scene.
Source: Calgary Herald