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Calgary's real estate market to avoid the major correctionAt the end of last week, another report from one of Canada's largest banks was released in regards to the Canadian housing markets. This time it was from their research branch: TD Ecomomics (for TD Bank, TD Waterhouse, TD Canada Trust).
 
They report that the Canadian housing market in 2012 will be in a battle between on the one side: low interest rates, and on the other side: economic uncertainty along with slow income and employment growth.
 
It's forecast that there will be huge price corrections in both the metro Toronto and metro Vancouver markets which have again heated up in 2011 - especially in the apartment condo markets. Combined with the price corrections, they also forecast a higher that average sales corrections for both cities in the next two years.
 
TD estimates that house pricing, on a national basis, are over-valued 10 to 15 percent, although that is expected to drop over the forecast period.
 
According to the report, there has been little upward pressure on home prices in Calgary for 2011. The Teranet index confirms this to be the case when homes with similar specifications are compared across time. A higher unemployment rate in the early part of the year may be a contributing factor to the dampened price appreciation. In contrast to the relatively flat reading on prices, sales will close 2011 higher by 7.5% compared to the annual average in 2010. Higher sales activity appears to have been in the lower end of the pricing distribution and have kept pricing from rising.
 
Solid annual economic prospects, full-time employment opportunities, net in-migration, low mortgage rates and solid income gains supported housing in 2011 and they expect such drivers to hold steady in 2012. However, the second half of 2012 should be better than the first half, given the former is when they expect commodity prices to stabilize. In turn, they have the region squeaking out positive price and sales gain, at a time when the national tally is expecting to see declines. Calgary will not be immune from the impacts of higher interest rates and in turn, they have incorporated modest price and sales declines in 2013. Relative to the national story, however, the region is expected to out-perform most others over the TD Ecomomics forecast period.
  

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