A blog cannot deal with all aspects of a subject and is not intended to replace professional advice. It's purpose is to highlight information and identify areas of possible interest. Anyone wishing to discuss this blog or to make any comments or suggestions about this blog is invited to do so by either posting comments or emailing me directly.
January 5, 2012
Economists Cautiously Optimistic for 2012 Calgary Real Estate Market
In 2011, there were 13,186 single-family MLS sales in Calgary, up 9.06 per cent from the previous year while the average sale price increased by 1.14 per cent to $466,402. There were 5,382 condo sales, up 3.98 per cent, but the average price dipped by 0.94 per cent to $287,172.
Dan Sumner, economist with ATB Financial in Calgary, described the local housing market in 2011 as “slightly disappointing.”
“We definitely saw a rise in sales from 2010 but sales still remain quite slow compared to 10-year averages ... Prices have been flat for now 2 years and it really continued along in 2011,” he said.
Sumner said he’s cautiously optimistic for 2012.
“Overall the Canadian housing market in general I wouldn’t say it’s in a place where I’d want to put a lot of money right now if I had to bet on it,” he said. “But as far as housing markets in Canada go, I think the ones in Alberta are probably the best — Edmonton and Calgary. That’s just because the economy here is really growing quite strongly and because prices have been a little bit slower to rise over the last couple of years.
“The Alberta economy is performing beautifully. It continues to perform beautifully. As long as oil prices remain up where they are, it’s never a certainty, but given the fact they’ve been very resilient thus far ... then the Alberta economy is going to continue to hum along.”
He also said there is no indication there will be much upward movement in interest rates in 2012 which will help fuel sales in the real estate sector.
Canada Mortgage and Housing Corp., in its Housing Market Outlook report in the fall, forecast MLS sales in the Calgary census metropolitan area to increase by 2.3 per cent in 2012 and the average sale price to jump by 2.2 per cent to $411,000.
“Many factors that support resale housing demand have become or remained favourable this year, including growth in full-time employment, low mortgage rates, and improved net migration,” said the agency. “However, competing factors such as uncertainty in the global economy has kept some prospective buyers on the fence and will continue to temper any large increases in sales.”
Source: The Calgary Herald, 2012-01-05 Read more.
They are definitely talking growth in both jobs and population. They have not yet started talking about any significant growth in real estate prices. In fact, in 2013 it's expected that any small growth we see in the next 12 months will be erased when interest rates start to climb. But they are not forecasting a "real estate market crash". We felt a bad crash in 2007 locally and just as it was starting to recover in 2008, the world financial crash impacted the Calgary area market. We still haven't recovered from then.
Growth in jobs and population, would indicate higher demand for occomodation. If we don't see that higher demand reflected in real estate prices, expect higher rental rates and some absorption of the ton of vacant rental property available (but currently sitting in the resale real estate market).
Post Your Comment: