Canada’s real estate markets have been making a comeback in recent times and the skyrocketing growth of Toronto and the GTA (Greater Toronto Area) is a case in point. Even Vancouver is witnessing a revival in demand along with other major zones. Calgary is no exception as homebuyers are cashing in on higher affordability to make purchases.
This has naturally boosted the real estate market, particularly in the sub-$500,000 category. This is the major growth driver for the Calgary housing market at the moment and the trend looks set to continue as per studies and reports.
Calgary housing market growth driven by affordable category
Calgary area sales figures increased for the fourth successive month as noted by experts in October, 2019. This has brought the Calgary housing market closer towards achieving more balance as per reports. The Calgary Real Estate Board has already released its figures for October and this indicates clear year-on-year growth which has been majorly spurred by higher transactions in the sub-$500,000 category.
Chief economist at the Calgary Real Estate Board, Ann-Marie Lurie has already emphasized upon this aspect as part of the report. She has confirmed that most of the growth has been in this price band and this has made a huge difference for the market. Lowering inventory of homes is another positive aspect which has also driven the Calgary real estate market towards finding a better balance between property sellers and buyers. However, in case of homes priced over $500,000, sales figures are still a little sluggish and inventory levels are comparatively on the higher side.
Vital details worth noting
Home sales increased by 10% overall (year-on-year) in October 2019 as compared to October 2018. Last month, 1,440 homes were sold as compared to 1,320 units in sales for October, 2018. Yet, on the year-to-date framework, sales volumes increased by only 1.4% as compared to the same period last year. Several metrics are witnessing decent improvement as per experts which includes overall supply of homes. New listings came down by 2.5% last month (year-on-year) although they reduced by 11% on the year-to-date framework.
Extra months for supply levels came down by a whopping 20% last month as compared to last year. The benchmark pricing for homes came down by 2% and more in October, 2019. This touched $422,900 in Calgary in spite of increasing property sales volumes. This clearly indicates that the major chunk of sales figures can be attributed to the affordable segment. The reason for this can be the current employment scenario in Calgary where growth has been observed mostly in job sectors which have lower wages as compared to jobs in the energy sector for instance. Lower high-income job opportunities indicates lower sales growth for detached homes. Sales volumes increased by 2.8% last month for this category as compared to October 2018 and year-on-year benchmark pricing fell by 1.8%.
In comparison, sales figures increased by a whopping 17% for apartment condominium units last month (year-on-year) and attached sales figures increased by a handsome 25%. Prices still came down by approximately 2% and 3% in these categories respectively. However, this can be attributed towards previous oversupply which the market is clearing out at the moment. Attached homes witnessed a fall in new listings by 4.7% (year-on-year) while months of supply came down by a whopping 295. Sales figures also went up in adjoining areas last month and 3% growth was posted by zones like Okotoks, Airdrie and Cochrane among others.
Calgary’s housing market is thus clearly driven by affordable housing below $500,000 and this is where most of the growth will be in the future as per experts. The market is shifting towards achieving balance and shaking off oversupply conditions although it continues to remain tilted in the buyer’s favour at the moment.
The affordability levels are high in the market and this will keep drawing more buyers since they will have more choices at reduced price points as compared to previous years. Calgary’s real estate market is thus expected to continue its positive growth momentum in the near future according to experts, driven by soaring customer demand in the entry-level housing space.