CALGARY — Home prices in Calgary grew at the fastest year-over-year pace in Canada in March, according to a report released Monday by the Canadian Real Estate Association.
The association, in its MLS Home Price Index, said Calgary’s resale market saw growth of 7.72 per cent in its benchmark price.
Nationally, of seven Canadian centres surveyed regularly in the index, price growth was only 2.20 per cent from last year.
"Housing market conditions in Calgary have supported price growth as the steady pace of sales is met with a decline in active listings," said Richard Cho, senior market analyst in Calgary with Canada Mortgage and Housing Corp. "With lower supply in the market and homes selling a bit quicker compared to the previous year, home prices have risen. However, the increase is also partly due to a higher proportion of homes sold in the luxury home market."
In March, CREA said MLS sales in Canada of 39,527 fell by 15.3 per cent compared with a year ago while in Calgary the drop was only 0.6 per cent to 2,631 transactions.
New listings in Canada were down 8.5 per cent to 81,677 and they were off by 6.7 per cent in Calgary to 4,225.
The average sale price in Calgary grew by 7.7 per cent to $441,424 while in Canada it was up 2.5 per cent to $378,532.
In Alberta, sales dropped by 2.9 per cent to 5,605, new listings were off by 9.0 per cent to 9,781 and the average sale price was up 6.5 per cent to $386,330.
Doug Porter, chief economist with BMO Capital Markets, said all major home price measures are displaying unusual uniformity at present — the average and median price are both up between two per cent to three per cent.
"The main story is that home sales have taken a big step back since last spring but prices are holding up," he said. "The market remains relatively balanced, albeit with a distinct fade. Look for the headline figures to turn less negative later this year, although we still expect a seven per cent drop in annual sales for 2013."
Sonya Gulati, senior economist with TD Economics, said the Canadian housing market is beginning to thaw out from its regulatory-induced freeze.
"We do not anticipate a sizeable revival in the housing performance in the months ahead: the economy is growing modestly, housing demand has waned, and Canadians are paring back their debt levels," she said. "In turn, both price and sales levels are poised to stabilize in the coming months. The disappointing start to the year and the near-term trajectory ahead will mean a lacklustre 2013 for the record books.
"Housing is always a regional story and this month is no exception. The tug-of-war across the major markets is set to endure leaving national price gains flat for the year as a whole."
David Madani, economist with Capital Economics, said the year-on-year drop in existing home sales supports his view that a potentially hard housing market correction is underway.
"Assuming that home sales continue to trend lower this year, then this will eventually lead to outright home price declines," he said.
"We expect existing home sales to trend lower over the spring and summer months . . . As housing demand continues to soften this year, residential investment will remain a drag on economic growth, particularly next year as house prices begin to revert back towards household incomes and housing rents."
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