Calgary home sales, home prices, and home starts are all up – and going up! And while many might say that rising home prices are bad news for the economy, in fact it’s just the opposite. The good news is just that – good news!
The chart below shows just how good that news is. Home prices in Calgary will jump up by over $20,000 and housing starts have increased by 3,000 units compared to where they were 2 years ago. Throw in the fact that sales are also up – a clear sign that all the increases are not doing anything to keep buyers from the market.
So why the jump in every element of the Calgary housing market? It can all be attributed to the booming economy the city is currently enjoying. So says Richard Cho, senior market analyst in Calgary for the Canada Mortgage and Housing Corporation.
“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,” says Mr. Cho. “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.”
Economic growth and job creation have both experienced a huge boom in Calgary over the past year, and that’s helped support the increase in prices. As people continue to gain employment, and oftentimes, at higher-paying salaries, there’s more room for them on the housing market – and often at higher prices. And it doesn’t just help new buyers on the market either, says CMHC, but current homeowners as well.
“Existing homeowners will see the value of their property rise and this will help with move-up buying,” said CMHC.
Along with that statement, the federal agency also talked about how multi-family starts are going to rise by about 35 per cent this year. However, for those that are worried about an overstock of condo inventory on the Calgary market, just as they are in Toronto, developers will pull back in 2013, reducing the amount of units being constructed by about 600 units.
But it’s not just job growth, rising home prices (and values,) and an increase in housing starts that are contributing to the healthy housing market in Calgary. The resale market is also helping to keep things chugging at a more normal pace than in years’ past – and that market segment will continue to keep doing so. A quick look at the chart will show just how well that segment will continue grow.
Mr. Cho also pointed to the resale market in his report saying that this sector will continue to grow for a number of reasons – immigration to the city being just one of them.
“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. Supply in the existing home market has declined from the previous year, while sales have increased,” says Mr. Cho.
Just like with any other city at any other time, there are a number of different factors coming into play on the Calgary housing market right now. What doesn’t happen all the time is that right now in Calgary, everything is up – making this one of Canada’s best cities to be in!
