Calgary house prices on the rise
Calgary’s residential real estate market continues to post price gains amid renewed concerns of a housing correction.
Prices for detached bungalows and standard two-storey homes have both risen from a year ago, according to the latest Royal LePage House Price Survey released Wednesday.
In the third quarter, detached bungalows posted the largest year-over-year price increases, rising 6.5 per cent to $434,267. Prices for standard two-storey homes rose 4.1 per cent to $431,544. Standard condominiums declined by 2.1 per cent to $249,167.
“Calgary’s real estate market was very active during the third quarter,” said Ted Zaharko, broker and owner of Royal LePage Foothills. “Despite recent changes to mortgage lending rules, we saw a variety of buyers, including first-time home buyers, enter the market.”
Zaharko said the number of residential properties on the market is down slightly from last year.
“I’ve seen several wellpriced properties sit on the market because buyers want to explore their options,” said Zaharko. “The shortage in inventory levels has not changed this — buyers like to shop around before making an offer.”
Nationally, the average standard two-storey home in Canada increased four per cent year-over-year to $403,747, while detached bungalows rose 4.8 per cent to $366,773.
Royal LePage said most cities in Canada experienced modest price appreciation in the quarter, but fewer homes were sold compared with the same period in 2011.
“A drop in the number of homes trading hands typically precedes a period of softening house prices. Where there is reduced demand, those who want to sell their homes adjust their asking price to stimulate interest,” said Phil Soper, president and chief executive of Royal LePage.
In July, the federal government announced the maximum amortization period for insured mortgages would be reduced to 25 years from 30 years. Royal LePage said this latest intervention — the fourth in four years — was the most impactful, especially with potential first-time buyers.
“While hard-hit in the shortterm, we expect first-time buyers to adjust to the tougher mortgage qualifications. The dream of home ownership is very much alive among young Canadians,” said Soper.
“In the meanwhile, we will feel their absence in national sales statistics.”
Queen’s University real estate expert John Andrew said he is surprised that while the number of homes sold in some most Canadian real estate markets is declining, home prices haven’t dropped as well.
“Home prices are defying logic and holding remarkably steady, or in some cases, still rising significantly, such as in Toronto and Calgary,” he said.
“This will be temporary, with a normal lag of three to six months between significant sales volume changes and home price changes.”