Home prices have recently made small year-over-year gains as immigrants and migrants from other provinces flock to the city for jobs. There are less affordably-priced, single-family listings available in the resale market than last year, and the rental market is downright tight – the vacancy rate sits at 1.3 per cent, one of the lowest in Canada.
Calgary Real Estate Board chief economist Ann-Marie Lurie says these and other signs point toward relatively “balanced” growth in the residential market this spring.
But the combination of stubbornly low natural gas prices and the discount on Canadian heavy oil – in part due to pipeline congestion – is a wild card, she says. “We are able to attract migrants here because we have good, high-paying, full-time jobs. If we can’t attract those migrants here, then that does start to impact that [housing] growth.”
That doesn’t deter Salem Woodrow.
“I always have my doubts about the economy, so it always makes me step back and think, ‘well maybe we wait six months,’ ” says Ms. Woodrow, 25. “But at the same time, I don’t believe that the economy will change so much that it will seriously affect my purchase.”
Ms Woodrow, has no doubts about what she wants: a house built between 1980 and 2005, somewhere in Calgary’s south, with a final price tag no higher than $350,000. Originally from Winnipeg, she and partner Ryan Mayman, 28, think they’ll be living in Calgary for at least five more years. And with a sizable down payment, they’re continuing in their search for a home despite lingering fears about overinflated real estate values and the health of the province’s economy.
“I’d feel much more comfortable if some of these new pipeline expansion projects went through,” Ms. Lurie says. “That is really our bread and butter.”
Even with some uncertainty, the Canada Mortgage and Housing Corp. is forecasting that sales in Calgary will rise moderately, and the average residential resale price – which includes single and multifamily homes – will hit $423,000 this year, up by about 2.6 per cent from 2012. The CMHC also said that the number of new single-family housing starts will stay flat, while multifamily starts will actually decline from 2012.
Calgary realtor Betty Pach – who specializes in first-time buyers – says gone are the days when young buyers were “dazzled by the stainless steel and granite glitz.” She credits increased steadiness in the housing market to a number of factors, including Ottawa’s decision to cool things down by capping the maximum mortgage amortization period at 25 years instead of 40.
“That is realistic,” Ms. Pach says. “Overextending themselves is not going to make them a happy homeowner.”
Kelly Cryderman, Calgary
TORONTO: EXPENSIVE, WITH EVEN RENTAL PRICES MOVING UP
Prospective Toronto first-time buyers Mr. Padley and Ms. McGovern are coming to terms with the fact that the house they want probably isn’t the house they can afford.
“A semi-detached would be ideal, but for our price range it’s going to have to be a townhome and it’s going to have to be outside of the area that we want to live in,” says Mr. Padley, 31.
Mr. Padley works in software development and his wife in pension administration, and the couple has managed to save up a 20 per cent down payment. They want to spend no more than $350,000 to $400,000, but their bank preapproved them for a mortgage of about $900,000. “It’s ridiculous.”
The couple currently expect that they will remain renters for much or all of the year. They looked into renting a larger place, one big enough to start a family in, but balked at the costs of those as well.
Such are the challenges of many young prospective first-time buyers in the country’s most populated city. Home prices in the Greater Toronto Area (GTA) rose by 6 per cent in just the first six months of 2012, reducing affordability, said Shaun Hildebrand, senior market analyst in Ontario at Canada Mortgage and Housing Corp. They then nudged down about 2 per cent during the fall, and have since essentially stabilized.
Given the high prices, many people are choosing to rent. Rental vacancies are at one of the lowest levels of the past decade and rent levels are rising.
“What’s been common is that an owner will list their property for both sale and rent at the same time, and then whatever is most appealing, they’ll go with that,” Mr. Hildebrand says.
Sales over the Multiple Listing Service in February fell 15 per cent in the GTA. Sales of condos in the downtown region covered by the 416 area code dropped 20 per cent, with prices falling 4.7 per cent from a year ago to $352,614 on average. Sales of detached homes in that same downtown area fell 17 per cent, while the average price held roughly flat, rising 0.1 per cent to $823,329.