Calgary real estate expected to ease in 2013
Demand is forecast to moderate
The pace of Calgary home sales will slow in 2013, the Calgary Real Estate Board said Tuesday in a preview of its annual forecast.
Ann-Marie Lurie, CREB’s chief economist, said sales growth is expected to be about two per cent as employment gains and migration levels ease, weakening demand for housing. Prices are forecast to increase about 2.9 per cent next year, said Lurie.
“Clearly, if global economic conditions change and commodity prices decline, this will dampen the market,” she said.
The CREB outlook was supported Tuesday by a Scotiabank report that said the Canadian housing market appears to have achieved “a soft landing” so far with sales cooler but still fairly steady along with prices.
Nationally, sales in October were down about 10 per cent from the spring, but only marginally below the average pace of the past decade, said the report by Scotiabank economist Adrienne Warren. Bob Jablonski, CREB’s president, said continued growth in Calgary contrasts the situation in some major Canadian markets which are contracting.
CREB will release its full forecast at its annual conference next month.
Total MLS sales in Calgary are up 15 per cent through November compared to 2011, while the average sale price has grown about three per cent to $428,208. Single-family home sales are up almost 16 per cent from a year ago to 14,367. The average sale price has increased three per cent to $480,421. Sales in the condo apartment sector are up 11 per cent. The condo townhouse category has grown 17 per cent.
Don Campbell, president of the Real Estate Investment Network in Canada, said Calgary bucked the national trend in 2012 due to the economic fundamentals underpinning the market.
“We saw large population growth. We saw average incomes increasing. We saw job growth. We saw a vital economy which of course brought people in from across the country,” said Campbell.
“We saw the (rental) vacancy rates fall off which is always an indication that a year from then the housing market would start to pressure upward. We’ve seen that.”
Scotiabank’s Warren said the recent national moderation mirrors a modest softening in the job market over the summer and follows repeated warnings to Canadians to be careful about the amount of money they borrow.
The easing also follows a tightening of mortgage lending rules by the federal government in the summer. Housing demand in much of the country is expected to remain on the softer side for now, she said. “This could put some further downward pressure on sales volumes as well as prices, especially in markets that have already shifted into buyers’ territory or in certain market segments that are potentially oversupplied,” she said.
“However, with the Canadian economy continuing to post healthy job growth and sellers proving responsive to the underlying shift in market conditions, a sharp decline in prices nationally is unlikely.”