Average house prices in Calgary region to jump by $20,000 in next two years
CALGARY — The average MLS residential sale price in the Calgary region will climb by more than $20,000 over the next two years, according to Canada Mortgage and Housing Corp.(http://www.cmhc-schl.gc.ca/odpub/esub/64339/64339_2012_B01.pdf?fr=1344960776770)
In its third quarter 2012 Housing Market Outlook, released Tuesday, the CMHC said the average MLS sale price in the Calgary census metropolitan area will jump from $402,851 in 2011 to $413,000 this year and then to $424,000 in 2013.
The report also said MLS sales in the Calgary CMA will increase from 22,466 in 2011 to 25,200 this year and 25,800 next year.
And housing starts in the region will rise from 9,292 in 2011 to 12,000 this year but fall back to 11,700 in 2013.
“The economy in Calgary has improved compared to the previous year and the trends that we have seen thus far are expected to continue in the months ahead,” said Richard Cho, senior market analyst in Calgary for the CMHC. “Job growth, relatively low mortgage rates and higher average earnings will all contribute to housing demand. Net migration will also be a key contributor and we have already seen some encouraging numbers at the provincial and city levels.
“Whenever we have an influx of people move to a region, naturally they are going to look for a place to live. Some will look to the rental market while others may choose to buy an existing home or build a new one. Housing demand this year will be supported by a number of different fronts.”
Cho said the resale market has moved into more balanced levels this year and that is supporting price growth.
“Supply in the existing home market has declined from the previous year while sales have increased,” he added.
In Alberta, economic growth and job creation are supporting housing demand, said the CMHC. By year-end, single-detached starts are projected to reach 17,600 units, up over 15 per cent from 2011. In 2013, single-detached starts will rise five per cent to 18,400 units.
“Existing homeowners will see the value of their property rise and this will help with move-up buying,” said the agency.
Multi-family starts will increase by 35 per cent in 2012 to 14,200 units. To reduce the risk of rising inventory in the next few years, developers will moderate multi-family starts in 2013 to 13,800 units, it said.
“In Alberta’s resale market, MLS sales will increase by 11 per cent to 59,800 units in 2012. In 2013, resale transactions in Alberta are forecast to increase to 61,000 units. MLS sales in Alberta will rise this year and next year, as employment and income growth provide the means to purchase,” said the report.
“With a transition to balanced market conditions unfolding, expect price growth to increase over the forecast period. The average resale price in Alberta is projected to rise by 2.5 per cent in 2012 to $362,200, and nearly three per cent to $372,300 in 2013. Both of Alberta’s largest markets, Calgary and Edmonton, have experienced improved market balance this year.”