The Calgary Real Estate Board took exception to a report released this past Monday noting that homes in Alberta were roughly 15 percent over-valued. Ann-Marie Lurie of that agency noted that after the price fall in 2007, the province has seen a steady but slow increase in prices. Lurie expects that slow price growth to continue, modestly this spring and possibly a bit slower beyond.
Alberta has seen the benefit of low unemployment, despite the number of immigrants coming to the province because of the booming job market. That in turn has bolstered the real estate market, but not to the extent that it inflated prices. Some of the recent price increases are the result of fewer homes on the market. Supply drives prices up or down. In February of this year, the average home price in Calgary came in at $457,179. This is a seven percent increase over February of 2010.
The Fitch report did headline with the statement that home prices across Canada may be inflated by roughly 20 percent. But, a sudden drop is not expected, nor is that 20 percent expected to be reached because of economic factors like inflation and price momentum.
In the report Fitch noted the actual decrease, over time, would be nearer to ten percent. Different parts of Canada are likely to see different results. Quebec and British Columbia would most likely see the highest decline, nearer the 15 percent mark. Alberta’s price decline is not expected to be nearly as steep.