The residential home market in Calgary is expected to bloom nicely in 2013. Buyers seeking to upgrade their homes will be the ones leading the sales, according to a report released by RE/MAX this past Thursday. That report noted that during the last ten years, housing values have appreciated some 108 percent. In 2002 the average asking price was $198,350, while in 2012 that figure jumped to $412,215.
Compare that to the nationwide figures, where average prices for homes increased by 93 percent over that same ten years. In 2002 the average was $188,164, while is 2012 that figure climbed to $363,740.
The RE/MAX report attributed the price increases to the low rates of interest, spurring sales, and the steady yearly increase in home values. In the current economic climate, homeowners are feeling comfortable enough to take the leap to that larger, more desirable property or perhaps to a luxury downtown condo. Over the last five years, equity gains have been minimal, but those that purchased earlier in the decade have seen solid appreciation.
Stats from the Calgary Real Estate Board are already showing 2013 to be off to a sound start. Looking at sales up until February 30th, Calgary’s MLS sales have increased 11.97 percent over the same time period in 2012. Sales prices have increased an average of 9.63 percent.
Tanya Eklund, a RE/MAX realtor, noted that inventory numbers are down, while sales are up, compared to last year. Sellers are seeing multiple offers due to the lowered inventory levels, on both empty land and resale properties.
Buyers are equally confident, making upward moves or investing in additional properties. Those interested in getting into the rental market are noting the low vacancy rates, which lead to higher rents and an increased cash flow.
Calgary’s average home price is down less than one percent from prices seen during the housing boom in 2007. Back then the average price per home was $416,399. The inventory shortage, particularly in the more desirable neighbourhoods could cause a marked increase in that average price.
First time buyers will also be more apt to get into the market. Encouraged by the still low interest rates, and the increasingly high rental rates, those that can qualify will be aiming to be homeowners by years end.
The RE/MAX survey covered 16 of Canada’s major markets. The ten-year appreciation in Calgary ranked seventh on that list. Regina took the first spot, with a 198.90 percent increase and average home price of $301,145. Saskatoon followed with 165.41 percent and average price of $315,834, then Winnipeg at 160.12 percent and average price of $255,058, St. John’s at 149.10 percent and average price of $285,529, Greater Vancouver at 142.17 percent and average of $730,063, followed by Edmonton at 122.63 percent and average price of $334,318.
Most of the gains were seen in the first five years of that decade. Since the recession the markets have been more muted, but consumer confidence remains positive. The primary driver in the market’s success has been the equity gains, particularly for those buying early on. First time buyers are also tending to stay in their original homes for less time than before, averaging between four and seven years before seeking to upgrade their home.