Real eState

Calgary’s homes market expected to see strong price growth

Published

5 months ago

April 25, 2024

“The lack of supply (of homes for sale) has driven prices upwards,” says Corinne Lyall, broker/owner of Royal LePage Benchmark. Photo by Jim Wells /Postmedia

Calgary’s already hot resale real estate market is forecast to keep booming for the rest of the year, a new report on price growth suggests. The recent Royal LePage report predicted that the average price of a home in Calgary will jump eight per cent by year’s end, capping off another year of strong growth.

Yet the current real estate boom is different from past ones, says a local realtor.

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Article content“The lack of supply has driven prices upwards,” says Corinne Lyall, broker/owner of Royal LePage Benchmark.

While short supply is not all that different from past boom markets, a key reason for low inventory is, she adds.

“Interest rates having increased in the last two years negatively affected homeowners,” Lyall says.

Typically as prices rise, move-up buyers list their home, but that is not happening to the same extent this time.

“Many may not want to move because they may still be holding onto a low interest rate for their mortgage,” Lyall adds.

Many are likely reluctant to sell because they are locked into fixed-rate mortgages at about two per cent compared with the current market fixed rates at about five per cent.

In turn, they have low motivation to move until rates move lower, she notes.

The overall low supply paired with rising demand from record migration to the city factor into Royal LePage’s prediction that the average price could reach $716,580 by the end of 2024. Already, the average price has grown nearly 10 per cent by the end of March, versus the same time last year, to about $674,000.

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Article contentDemand for single-family detached homes remains a notable factor in the market, with Royal LePage highlighting that the average price in March was $774,000, an increase of about 10 per cent year over year.

Other segments are seeing rising demand, too, in part because single-family homes are increasingly pricey, and affordable ones are in short supply, Lyall says.

To that end, the Royal LePage study notes the average condominium price by the end of March was $264,800, up nearly nine per cent from the same time last year. Calgary Real Estate Board statistics from March also reflect rising demand for apartment and row. Both saw the highest percentage gains in benchmark price year over year.

Apartments grew more than 17 per cent to $337,700, while row increased more than 20 per cent to reach $448,700.

All segments are seeing higher prices amid dwindling supply and high demand, marking a shift in focus on affordability amid higher borrowing costs, Lyall says.

Still, single-family detached homes remain the most active segment, accounting for about 44 per cent of all sales in March. Its share is decreasing as prices rise. As of mid-April, for example, the average price was $793,713, up 10 per cent year over year, according to CREB.

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Article content“It’s sort of a chicken and the egg thing,” says realtor Mark Neustaedter with eXp Realty in Calgary.

Inventory is low because of high demand, but it is not increasing because sellers worry about being able to find a home due to low inventory, he further explains.

New listings have been rising, up nearly 13 per cent for all housing types, CREB mid-April numbers show, but active listings have fallen 17 per cent.

Notably in March, housing supply fell 29 per cent to less than one month, the lowest level in more than a decade. Although far below the all-time record of 4,107 transactions in March 2022, the 2,664 resales this year still were the fourth highest strongest for March since 2010.

Yet even amid a strong seller’s market, price still matters because borrowing costs remain elevated, Neustaedter notes.

“Over-priced homes will still not sell, even in this hot market.”

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Real eState

Mortgage rule changes will help spark demand, but supply is ‘core’ issue: economist

Published

2 days ago

September 17, 2024

Anne Joseph

TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.

The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.

The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.

CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.

However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.

Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.

This report by The Canadian Press was first published Sept. 17,2024.

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Real eState

National housing market in ‘holding pattern’ as buyers patient for lower rates: CREA

Published

3 days ago

September 16, 2024

Anne Joseph

OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.

The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.

On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.

CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”

The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.

The number of newly listed properties was up 1.1 per cent month-over-month.

This report by The Canadian Press was first published Sept. 16, 2024.

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Two Quebec real estate brokers suspended for using fake bids to drive up prices

Published

1 week ago

September 11, 2024

Anne Joseph

MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.

Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.

Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.

She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.

The two brokers were suspended in May 2023 after La Presse published an article about their practices.

One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.

This report by The Canadian Press was first published Sept. 11, 2024.

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