Resale of single-family residences slows
The numbers ‘do not come as a surprise,’ Calgary Real Estate Board official says
Tightened restrictions on qualifying for a mortgage are said to be playing a role in slower activity through Calgary’s resale home market recently.
There were 1,518 sales on homes of all kinds in the city last month, a downtick of 20 per cent year over year, says the Calgary Real Estate Board. For single-family homes, alone, transactions pulled back 24 per cent last month to 908 sales from 1,192.
Between Jan. 1 and the end of April there were new owners for 2,991 single-family homes in the city, a 20 per cent setback from the same time last year.
“Slower sales do not come as a surprise, given the economy has not yet improved enough to offset the impact of changes in the lending industry,” says Ann-Marie Lurie, chief economist for CREB.
The Office of the Superintendent of Financial Institutions introduced revised guidelines for residential mortgage writing practices and procedures, starting this past Jan. 1.
Included in the changes is the introduction of a “stress test” for uninsured mortgages, requiring the borrower to qualify at the higher figure between the five-year benchmark rate published by the Bank of Canada and two per cent above the contracted mortgage rate.
Leading the city in single-family sales this past April was an area CREB defines south Calgary, ending the month with 176 deals. It was followed by 130 apiece in southeast and northwest Calgary, and 129 in north Calgary.
Fewer sales were joined by a soaring supply of resale singlefamily homes last month. New listings topped the April 2017 mark by eight per cent, while inventory was up 43 per cent year over year.
“The reality is that there’s selection heading into the active spring market,” says Tom Westcott, president of CREB. “For many sellers, they have to decide what price they are willing to accept for a lifestyle change. At the same time, buyers need to understand the supply dynamics and price movements in the specific area, as they may not align with their expectations.”
Neighbourhoods in south Calgary and north Calgary paced last month’s inventory tally with 657 and 537 single-family listings, respectively.
“While the rising inventories are being monitored, prices have remained relatively flat as gains in some areas of the city have been offset by declines in other areas,” Lurie says.
The benchmark price on single-family homes last month was $504,500, which is up $2,200 from the same month in 2017. Benchmark prices are that of a typical home based on a formula that uses various factors to ensure accurate comparisons.
The sharpest year-over-year increases in benchmark prices were in the city centre and west Calgary, with rallies of 3.5 per and two per cent, respectively, says CREB.
The city centre’s benchmark price last month was $699,700 and it was $733,100 in west Calgary.
For many sellers, they have to decide what price they are willing to accept for a lifestyle change.