Patience required in Calgary’s housing market recovery
City of Calgary, August 1, 2018 –
Recent struggles in the job market, accompanied by yet another interest rate increase, is piling on to the decisions potential purchasers have to make in the housing market.
The month of July saw 1,547 units sold in Calgary, nearly five per cent below last year. New listings eased to 2,964 units, causing inventories to total 8,450 units. With more supply than demand, prices continued to edge down, with a citywide average of $435,200. This amounted to a month-over-month price decline of 0.30 per cent and year-over-year decline of 1.89 per cent.
“Despite some positive momentum in some aspects of our economy, our job market has continued to struggle as of late, with some easing in total employment levels over the past few months and persistently high unemployment rates,” said CREB® chief economist Ann-Marie Lurie.
“Also, the Bank of Canada raised rates again in July. Rising costs, combined with a slow recovery, are weighing on the demand for resale homes in the city. At the same time supply remains high and is resulting in an oversupplied market.”
Citywide months of supply have risen for each property type and currently range from nearly five months in the detached sector to seven months in the apartment sector. These elevated levels have been placing pressure on prices in the city.
Detached benchmark home prices totaled $501,300 in July, down 0.4 per cent from last month and over two per cent from last year’s levels. Year-to-date average benchmark prices in the detached sector remain just below levels recorded last year.
The apartment ownership sector continues to see the steepest declines, with year-to-date benchmark prices averaging $257,343, three per cent below last year and nearly 14 per cent below 2014 highs.
“In a buyers’ market, it’s critical for all parties to have the most up-to-date information to make a fully informed decision, whether you are buying or selling,” said CREB® president Tom Westcott.
“A REALTOR® can help make an accurate determination on how much to sell a home for or how much is too much when purchasing one.”
HOUSING MARKET FACTS
- Oversupply issues continue to worsen in each district of the city compared to last year. However, compared to historical conditions, conditions today remain better than in 2016 in both the West and City Centre districts.
- Year-to-date, the West and City Centre areas have recorded prices higher than last year’s levels and continue to edge towards price recovery. Benchmark prices in the West have averaged $733,329 this year, comparable to previous highs.
- City Centre benchmark prices have averaged $693,243, nearly three per cent below previous highs. Most districts have recorded detached prices that remain over four per cent below previous highs.
- Easing new listings in the apartment condominium sector have prevented any further gains in the amount of inventory in the market.
- Supply levels remain elevated compared to sales, keeping year-to-date prices three per cent below last year’s levels and nearly 14 per cent below previous highs.
- Citywide inventory levels remain just below last year. July inventories edged down in the North East, North, North West, South and East areas of the city compared to the previous year.
- Levels remain elevated by historical standards, but any reductions in inventory can help reduce oversupply.
- Like the other sectors, attached sales have been easing this year, with 2,225 sales this year representing a 15 per cent decline over the previous year.
- Gains in new listings pushed up inventory levels and months of supply compared to last year.
- Citywide year-to-date semi-detached prices have eased by nearly one per cent compared to last year. Benchmark price changes have ranged from a three per cent decline in the North West district to a six per cent increase in the South district. Despite the annual gain this year in the South district, semi-detached prices remain nearly five per cent lower than that district’s peak.
- Year-to-date benchmark row prices have increased on a citywide basis due to gains in the City Centre, North and North West districts. The annual gain is a positive move towards recovery, but row prices remain well below previous highs in every district of the city.
REGIONAL MARKET FACTS
- 2018 Airdrie residential sales have totalled 732 units so far, which is 11 per cent lower than the same period last year. Sales are at the lowest level when compared to the same period in the past six years.
- Year-to-date new listings remain just above last year’s levels, totalling 1,600 units and reaching a new peak when compared to the same period in previous years. Total inventories in Airdrie have averaged 544 units this year, approximately 100 units higher than the same period in 2017.
- The rise in inventory, combined with easing sales, has caused months of supply to average over 5.2 months for the year, impacting prices.
- Detached benchmark prices have averaged $372,386 so far this year. This is 1.29 per cent lower than in 2017.
- Year-to-date residential sales in Cochrane totalled 380 units. Compared to the same period in 2017, this number has declined compared to last year. However, total sales continue to be above long-term averages and levels during 2015-16.
- New listings are also at historical highs and have reached a new peak of 862 residential units. This has pushed year-to-date average inventory levels up to monthly levels of 390 units and causing months of supply to average six months for this year.
- Despite gains in supply on the market, detached benchmark prices in Cochrane remain relatively stable. Year-to-date detached prices averaged $425,714, just above last year but still nearly four per cent below peak levels.
- Total residential sales in Okotoks have totalled 320 units so far in 2018. A decline over the previous year and below long-term trends.
- New listings remain elevated and comparable to periods in previous years. This has kept inventories at near-record levels, with year-to-date average levels being totalling 248 units.
- Months of supply have averaged 5.4 months this year, higher than historical standards. However, the elevated levels have not prevented prices from starting to recovery.Overall, year-to-date detached benchmark prices have averaged $436,786 this year, just above last year but nearly three per cent below peak levels.
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