A rise in single family home sales in Calgary during the first quarter have offset declining sales in the condo market, which indicates single family sales will drive the housing market in 2011.
According the latest figures released by the Calgary Real Estate Board (CREB), single family home sales in the first quarter of 2011 were 3,309, a four per cent increase over the first quarter of 2010. The combination of stable home prices, low interest rates and year-over-year improvements in employment are the primary factors fueling the growth.
“Improved affordability levels in single family homes have offered some individuals the opportunity to purchase homes in areas of the city that were once unattainable,” says Sano Stante, president of CREB.
Improved selection of affordable single family homes and higher inventory levels of new condominiums have reduced the demand for resale of condominiums. It is anticipated that demand should gradually recover in the latter half of the year, as Calgary’s economic recovery continues to take hold. “This provides a window of opportunity for condo buyers early in the year to discover a large selection of available product at affordable prices,” said Stante.
Dan Eisner, CEO of Calgary-based True North Mortgage thinks rising oil prices will have an effect on the market. “I do believe the high oil prices and the positive press the oil sands have received lately will lead to a rise in annual bonuses in Calgary which will lead to higher home prices,” he told MortgageBrokerNews.ca.
March 2011 single family home sales totaled 1,355, a three per cent decrease over March 2010 figures. The decline in sales was accompanied by a 19 per cent year-over-year decline in new listings. As a result, inventory remained at three months, which indicates a balanced single family market.
Calgary Metro average price of single family homes in March 2011 was $462,947, a two per cent decline from March 2010, and virtually unchanged from the previous month. Meanwhile, the median price declined by five per cent compared to March 2010.
Quarterly condominium sales continue to fall over levels recorded in the previous year, down by 11 per cent compared to the first quarter of 2010, while quarterly average prices are down by one per cent. It is important to note the quarterly average price of condominiums is skewed upwards for 2011 due to the sale of a $4.1 million condominium. If we remove this sale, quarterly average price would have declined by over two per cent.
The average price of condominiums in March 2011 was $280,781, while the median price was $256,000, a respected 5 per cent drop and seven per cent, respectively, from levels recorded in March 2010.
Dan Mass a broker with Verico Canada First Mortgage in Edmonton says the housing market in the province during the first quarter is very similar to last year, when new mortgage rules were also introduced.
“There were mortgage rule announcements that led to a number of early purchases and refinances,” he told MortgageBrokerNews.ca. “Certainly low interest rates have been a tremendous assistance in affordability, but I’m also seeing a general conservative mindset towards financing even after the tightening of the rules. Focusing on today’s affordability and qualifying with the future rates will leave more breathing room when the rates actually do rise.”