Calgary’s tight housing inventory is starting to ease as more properties hit the market. But realtors say high prices for single-family homes continue to push more buyers into condos.
“Listings are going up so the market should be moving into more balanced conditions, and in particular we’re seeing fairly strong activity in the condo sectors versus what we’re seeing in the single family,” said Ann-Marie Lurie, chief economist at the Calgary Real Estate Board.
“There is a lot less product available under $400,000 in the single-family sector,” steering buyers in that price range toward the condo market, she said.
A flood of migration and a tight rental market has stoked home prices in the southern Alberta city, prompting concerns over high levels of household debt as consumers borrow heavily to finance purchases.
But migration levels, while still strong, appear to be easing, Ms. Lurie said. New listings are leading to expectations that the housing market is entering more balanced territory, despite a revival in corporate deal making and improved prices for the province’s gooey crude oil.
Official numbers for August are due out next week, but preliminary figures show new listings jumped 14.7 per cent from a year ago, to 2,666. Total sales climbed 6.77 per cent to 1,892, according to CREB. The numbers are down from July, reflecting a seasonal pullback, Ms. Lurie said.
“We’re starting to see that listings are improving, so we’re moving out of this seller’s territory, which is really what’s been causing a lot of those high price gains,” she said. The benchmark price of a single-family home was $511,600 in July, up 10.8 per cent from a year earlier.
The trend is echoed nationally. In the second quarter, there was an 8-per-cent surge in new listings, following three consecutive quarterly declines, according to a report by RBC Economics Research. That helped “unclog” markets such as Toronto, where a lack of listings had stifled activity. Resales were also helped by declines in fixed mortgage rates, the bank said.
A sharp slowdown in Canada’s housing market “is not imminent,” Craig Wright, senior vice-president and chief economist at RBC, said in a statement. “In the coming year, however, we do expect the market will gear down its resale levels and that the rate of price increases will soften,” he said.
Calgary has so far escaped dire warnings that have characterized condo markets in other Canadian cities, namely Toronto. But developments are picking up: construction on Avenue, a two-tower 319-suite project in the city’s west end, is under way. Meanwhile, two massive residential towers are planned on the downtown’s western edge.
For now, Ms. Lurie said she’s not hearing any concerns over a potential glut. “But it depends on how many are constructed,” she said.
“It depends on how many more announcements come and how many of them actually start and what impact that has. Based off current starts activity, we’re not expecting to be in any type of oversupply scenario.”