Calgary’s housing market still favours purchasers
The assessment for the Calgary area housing market has held steady with a rating of moderate vulnerability, says a federal agency.
In Canada Mortgage and Housing Corp.’s Housing Market Assessment for the first quarter of 2018, the Calgary census metropolitan area was one of four markets to earn a moderate degree of vulnerability. The other three were Edmonton, Saskatoon, and Regina.
The report put the housing market for Canada, overall, at a high degree of vulnerability. Toronto and Hamilton in Ontario, and Vancouver and Victoria in British Columbia, were rated as highly vulnerable, as well.
A market’s overall assessment is based on how it’s rated for overheating, price acceleration, overvaluation, and overbuilding.
The Calgary area — which includes activity in nearby cities and towns, such as Airdrie, Cochrane and Chestermere — was assessed at low degrees of vulnerability for overheating, price acceleration, and overvaluation, but a high degree of vulnerability for overbuilding.
When it comes to rating overbuilding, two factors CMHC looks at include apartment rental vacancy rates and inventory.
“Although it has come down over the previous year, it’s still fairly elevated, well above historical averages,” says Richard Cho, principal of market analysis for CMHC in the prairie region, on vacancy rates in the Calgary area.
For inventory, CMHC reviews numbers on both the single-family and multi-family ends of the market, but Cho adds “really, it’s the multi-family segment where we’re seeing high inventory levels, which is contributing to the evaluation around overbuilding.”
“The market in Calgary, for the most part, is still recovering,” says Cho. “We’re not seeing a lot of pressure when it comes to prices ... so it’s relatively still in a buyers’ market. I think we’re moving closer to that balanced level, but I think the market still favours the buyer.
“The economy has been improving and so we’re seeing economic and demographic factors and fundamentals more closely in line with current price levels.”
The Calgary area has held its moderate vulnerability rating since January 2017. Prior to that, it earned a high degree of vulnerability in October 2016.
Housing markets in Ottawa, Montreal, Quebec, Moncton, Halifax, and St. John’s all received an overall assessment indicating a low degree of vulnerability through CHMC.