ALBERTA’S HOUSING MARKET TO LEAD NATION
Province bucks national trend in November
The resale housing markets in Calgary and Alberta are expected to set the pace in Canada this year and into next. The Canadian Real Estate Association forecast on Monday that the province will lead the nation in annual sales growth this year and in 2013.
The forecast comes after another good month in November, as the province went against the national trend for the real estate market.
The national association of realtors said Monday that Alberta MLS sales this year will finish up 13.1 per cent from last year, with 60,800 transactions.
It also predicted sales growth next year will lead the country at 1.3 per cent, climbing to 61,600 transactions.
Nationally, sales are expected to decline 0.5 per cent this year to 456,300, with a two per cent drop — to 447,400 — forecast for 2013.
The Real Estate Investment Network in Canada has ranked Calgary the top investment city in Canada for 2013 to 2016, said Melanie Reuter, the organization’s director of research.
Reuter said the rating is based on economic fundamentals and “the current housing market’s response to those fundamentals.”
While the news for Alberta was
We still think that house prices will decline by 25 per cent over the next year or two DAVID MADANI
positive in relation to the rest of the country, the forecasts for Alberta and the country were down from a CREA forecast released in September. At that time, the organization predicted Alberta annual sales growth of 13.8 per cent this year and another 1.7 per cent in 2013. For Canada, it had forecast sales to increase by 1.9 per cent this year but decline by 1.9 per cent in 2013.
On Monday, CREA said the average sale price in Alberta is expected to rise by 2.7 per cent this year to $363,100 and by another 2.3 per cent in 2013 to $371,300.
Across Canada, the national average sale price is forecast to increase by 0.3 per cent this year and next year to $363,900 and $365,100, respectively. In November, Calgary MLS sales of 1,831 were up 10.6 per cent compared with last year while on the national level sales dipped by 11.9 per cent to 30,573.
The average sale price in Calgary rose by 3.8 per cent to $413,921 but fell by 0.8 per cent across the coun- try to $356,687.
CREA on Monday also released its MLS Home Price Index of seven major Canadian markets. Regina’s annual price growth of 11.6 per cent led the nation followed by Calgary at 7.1 per cent.
The national aggregate price rose 3.5 per cent year-over-year, the seventh time in as many months that the year-over-year gain shrank.
David Madani, Canada economist for Capital Economics, said the decline in existing home sales across Canada supports Capital’s view that a potentially severe housing correction is underway.
“Assuming that sales continue to trend lower heading into next year, then sharper demand and supply imbalances will eventually lead to widespread home price declines,” he said. “We still think that house prices will decline by 25 per cent over the next year or two.”