Calgary housing boom predicted

Calgary’s housing boom is back with a new forecast predicting a 25% jump in housing starts this year and climbing prices, with growth fuelled by a red-hot economy.

The Canada Mortgage and Housing Corporation (CMHC) is forecasting a 24.8% increase in new homes being built this year, soaring from 9,292 units in 2011 to a projected 11,600 in 2012.

The corporation is also expecting the average home price to go up from $402,851 in 2011 to $410,000 this year and another increase in 2013 to $420,000.

Richard Cho, a senior analyst with CMHC, said apartment-style housing is seeing the largest gains in new construction.

“Improved job creation, rising incomes, increased net migration and low mortgage rates will support housing demand in 2012 and in the following year,” he said.

Calgary is seeing plenty of job growth because it’s home to energy companies and other businesses related to the industry, Cho said.

The analyst noted last year the housing market was more in favour of the buyer.

“This year, we’re seeing active listings trending lower as the price of sales is rising,” he said.

“The market is more balanced compared to what we saw last year and so we’re expecting to see more new homes being started and more resales.”

Bob Jablonski, president of the Calgary Real Estate Board (CREB), said the spike in numbers is good news for the market.

“It seems steady sales are happening, good activity going, and there’s a high consumer confidence out there,” he said.

“The market activity is good, it’s been good all year and it’s getting better.”

Jablonski said CREB’s forecast is usually much more conservative than CMHC.

The real estate board’s forecast in January indicated housing starts in Calgary for 2012 would be closer to 9,400, a minor jump from 2011 and significantly lower than CMHC’s prediction.

However, CREB’s prediction for an increase in average housing price is 2%, a tad higher than CMCH’s 1.8%.

Jablonski said they’re going to update their own figures in August.

Ald. Gian-Carlo Carra said it’s not surprising the housing boom is starting again in Calgary.

“I think everyone is expecting that to be the case — that’s not necessarily a bad thing, it’s actually a good thing but there are challenges associated with it,” he said.

The inner city alderman said the city needs to make sure that there’s a broad supply of housing options for everyone.

“I remain completely bitterly disappointed that council was not more progressive in its approach to secondary suites,” he said.

Carra said as housing prices increase and the supply shrinks, secondary suites are a good way to give owners another source of income and renters an affordable accommodation option.

renato.gandia@sunmedia.ca

On Twitter: SUNRenatoGandia

 

 

Fast Facts:

Average housing prices

2009 – $385,882

2010 – $398,764

2011 – $402,851

2012 (forecast) – $410,000

2013 (forecast) – $420,000

New Single detached housing

2009 – 4,775

2010 – 5,782

2011 – 5,084

2012 (forecast) – 5,700

2013 (forecast) – 5,900

New Multi-residential housing

2009 – 1,543

2010 – 3,480

2011 – 4,208

2012 (forecast) – 5,900

2013 (forecast) – 5,500

New Housing starts total

2009 – 6,318

2010 – 9,262

2011 – 9,292

2012 (forecast) – 11,600

2013 (forecast) – 11,400

Mortgage Rate (1-year)

2009 – 4.02%

2010 – 3.49%

2011 – 3.52%

2012 (forecast) – 3.37%

2013 (forecast) – 3.78%

Mortgage Rate (5-year)

2009 – 5.63%

2010 – 5.61%

2011 – 5.37%

2012 (forecast) – 5.26%

2013 (forecast) – 5.37%

 

Ali Abdalla

Ali Abdalla

Associate
CENTURY 21 Bravo Realty
Contact Me