By Myke Thomas ,Calgary Sun
CALGARY, AB - With talk the housing markets in Toronto and Vancouver are on the decline, talk about the Calgary market is upbeat, says a report from Royal LePage.
The House Price Survey and Market Survey Forecast shows varied year-over-year price increases for the housing types surveyed in Calgary. In the second quarter, detached bungalows posted the largest average year-over-year price increase, rising 5% to $432,322.
Prices for standard two-storey homes rose a modest 2.5% year-over-year to $425,456. Standard condominiums declined slightly by 0.8% year over year to $247,056.
“Despite the recent changes to mortgage lending rules, mortgage rates and packages still remain very attractive to buyers at all levels,” said Ted Zaharko, broker and owner of Royal LePage Foothills.
“Market activity has increased approximately 30% compared to the same period in 2011 and we are seeing every type of buyer making purchases.”
The report says by the end of 2012, the average house price in Calgary is expected to increase 6.5%, with market activity predicted to be the strongest in Canada with sales this year forecast to rise 18% above last year’s level.
Nationally, in the second quarter, standard two- storey homes rose 4.7% year over year to $408,423, while detached bungalows increased 5.5% to $376,311.
The average price for standard condominiums increased 3.3% to $245,825. During this period, signs from across the country clearly indicated the national housing market was at a turning point, with some major regions continuing to grow unabated while others peaked and began to pull back for the first time in three years.
“We have had three years of solid house price appreciation in almost all regions of the country,” said Phil Soper, president and CEO of Royal LePage Real Estate Services.
“Confidence in Canada’s real estate market is sound, but home prices cannot grow faster than salaries and the underlying economy indefinitely. Some regions have reached or perhaps even exceeded the current upper level of price resistance as buyers have embraced an era of historically low mortgage rates.”
The first-time buyer segment of the population, which represents up to half of all transactions and where activity strongly correlates to low interest rates, is expected to be slowed by recent regulatory changes that will reduce access to insured mortgages.
“The most recent set of mortgage changes, the fourth in four years, is also the most aggressive,” said Soper.
“The cumulative impact of these new regulations has created a significantly higher hurdle for young buyers seeking their first home and comes at a time when the market was slowing of its own accord.The timing of this intervention was unfortunate.”