CALGARY — Calgary’s residential housing market is poised for expansion in 2013, with move-up buyers set to lead the charge, says a report released Thursday by RE/MAX.
The report said the 10-year appreciation in average house prices for residential properties in the city and area was 108 per cent going from $198,350 in 2002 to $412,315 last year.
By comparison, average house prices across Canada jumped by 93 per cent during the same period from $188,164 to $363,740.
“Low interest rates and a slow but steady increase in average price have provided the impetus, with purchasers finding the current climate ideal for trading up to a larger home and/or better neighbourhood, or laterally, to a downtown condominium,” said the RE/MAX Move-Up Buyers Report about the Calgary market. “While equity gains have been limited over the past five-year period, those who purchased within the last decade have realized solid appreciation.”
Tanya Eklund, a realtor with RE/MAX Real Estate Central, said it has been amazing start to the new year in the market.
According to the Calgary Real Estate Board, year-to-date until February 20, MLS sales in the City of Calgary are up 11.97 per cent compared with the same period last year and average sale prices have increased by 9.36 per cent.
“Listing inventory is down and sales are up based on last year to date. We seem to be in this little sweet spot in the market right now,” said Eklund. “Sellers have gained momentum due to inventory levels and low selection. We are seeing multiple offers again, not just on land but on resale homes.
“Buyers seem to be very confident and are considering move-up homes or buying investment properties. Rental rates have increased due to the low vacancy so this is putting new buyers into the market and giving consumers confidence to purchase revenue properties again.”
Calgary and area average house prices are actually down slightly by just under one per cent from 2007 when they were $416,399 during the housing boom.
The RE/MAX report said a supply shortage, particularly in sought-after neighbourhoods, could place “serious” upward pressure on pricing once again.
“The strong economic fundamentals at play in Calgary and the province overall, will likely buoy the residential real estate market in 2013,” said RE/MAX. “While more experienced, move-up buyers are forecast to dominate homebuying activity this year, the first-time buyer won’t sit still for long. Pent-up demand — combined with a tight rental market — could spark renewed interest by year-end.”
Calgary’s 10-year price appreciation was the seventh highest in the country of the 16 markets surveyed by RE/MAX.
The top percentage increases and the average prices in 2012 were: Regina, 198.90 per cent, $301,145; Saskatoon, 165.41 per cent, $315,834; Winnipeg, 160.12 per cent, $255,058; St. John’s, 149.10 per cent, $285,529; Greater Vancouver, 142.17 per cent, $730,063; and Edmonton, 122.63 per cent, $334,318.
Against a backdrop of strong equity gains and lower interest rates, move-up buyers are once again set to ramp up their role in major Canadian housing markets, said the RE/MAX report.
Driving the upward movement has been substantial price appreciation in most major centres.
But gains have been more muted over the last five-year period.
“Canadian confidence in home ownership continues to fuel homebuying activity, particularly in the move-up segment,” said Elton Ash, regional executive vice-president for RE/MAX of Western Canada. “Equity gains have been a primary driver, with return on investment exceptionally strong in the past decade. In fact, the Prairies have seen a substantial upswing in housing values between 2002 and 2012, yet prices remain surprisingly affordable. Strong economic fundamentals helped fuel record price appreciation in markets like Regina, Saskatoon, and Winnipeg after decades of slow but steady growth.”
RE/MAX said the time between moves has decreased with first-time buyers generally prepared to upgrade within four to seven years after their initial purchase.