For those who have no idea how Calgary’s real estate market is looking these days, have no fear. We spoke with Ann-Marie Lurie, the Chief Economist for the Calgary Real Estate Board (CREB) to learn the essential facts about the current state of the Calgary real estate market.
How is the Real Estate Market Looking in Calgary?
If you had a hunch that the real estate market here in Calgary was doing well, then your hunch was right. According to Lurie, the Calgary housing market really outperformed expectations last year. Lurie says, “2013 saw very strong sales growth and very strong price gains across the city.”
During the last 12 months, single-family home prices recovered and exceeded previous highs. However, this recovery wasn’t seen for condos.
What are Calgarians Buying?
The majority of product that’s available in our market is still in that $300,000 to $500,000 range. However, the choice of homes on the lower end of the price spectrum is starting to decline; the rise in listings occurred at the higher end of the market.
Lurie says, “Because of the demand for this type of home, they tend to sell quicker and so they are more difficult to find.” In this area of the market, Calgarians have limited options: more and more Calgarians are moving out of the city to find a home that fits their price range of they’re looking at condos instead, which explains the rise in demand for the condo product.
Do Calgarians Prefer Luxury?
Buyers who bought homes costing more than $1 million in 2013 represented 3 per cent of the market. While this is small, it’s growing: in 2012, the amount of luxury sales activity represented 2.6 per cent of the market.
But this growth doesn’t mean that Calgarians are starting to prefer fancier homes. While more Calgarians are pushing into this market, high median incomes aren’t the only reason for a strong luxury market. For starters, prices have increased. Some homes that were in the $950,000 range a few years ago are now pushing into $1 million as costs go up. And typically, Lurie explains, new homes are coming in at a higher price range due to the cost of building.
Predictions For the Market
Lurie predicts that the real estate market will continue to see growth continue, but likely at a slower rate. “As prices increase, particularly in the single family home market, consumers have more options,” says Lurie. Lurie predicts that more growth will occur in the affordable section of the market this year and that sales growth will be strongest in the condo segments.
But Lurie also highlights the risks: “If concerns in the energy sector persist, we’re concerned about what the effects could have on the housing market. If we don’t get pipeline approval, for example, that can really impact confidence in the market; negative news can really make people a bit more skittish about purchasing a home – it’s a major purchase.”