By Mario Toneguzzi, Calgary Herald
CALGARY — Calgary led the country in April with the highest year-over-year growth in MLS sales, according to the Canadian Real Estate Association. In a report released Tuesday of housing market activity in Canada’s major centres, CREA said MLS sales of 2,720 in Calgary were up 30.3 per cent from a year ago. In Canada, sales of 49,480 for the month increased by 11.5 per cent from April 2011.
The average MLS sale price in Calgary rose by 0.7 per cent to $414,932 while it was up 0.9 per cent in Canada to $375,810. “Calgary is quietly becoming a market to watch,” said Robert Kavcic, economist with BMO Capital Markets, adding sales are back above the 10-year average for the first time in about three years.
“Prices have yet to gain much momentum but supply conditions are tightening rapidly across Alberta. The months’ supply was down to 4.6 from a post-recession high of more than eight, and sales have far outpaced new listings in recent months. If oil prices remain high enough to continue supporting strong economic growth and migration flows, Calgary could again become Canada’s real estate hot spot in short order.”
Robert Hogue, senior economist with RBC Economics, said April was the third consecutive “outsized” increase in Calgary which is a “clear indication that this market is finally taking flight.” New listings in Calgary of 4,370 increased by 4.4 per cent from last year. Throughout Canada, new listings rose by 4.9 per cent to 89,739. In Alberta, sales rose by 23.5 per cent to 6,191, new listings increased by 2.4 per cent to 10,718 units and the average sale price was up 1.9 per cent to $365,830.
“A number of Canadian housing market trends in April remained intact from the previous month,” said Wayne Moen, president of CREA. “Trends in Vancouver and Toronto continue to diverge. These two housing markets have an obvious influence on national statistics . . .” In Toronto, sales of 10,350 in April were up 14.5 per cent from last year and the average sale price rose by 8.4 per cent to $517,556. But in Vancouver sales fell by 13.2 per cent to 2,837 and the average price dropped by 9.8 per cent to $735,315.
“It bears repeating that the national average price was skewed higher last spring by record level high-end home sales in Vancouver’s priciest neighbourhoods, and that a replay of this phenomenon was not expected this year,” said Gregory Klump, chief economist of CREA. “Sales data confirm that high-end activity in Vancouver is well off the peak levels reached at this time last year, which is exerting a gravitational pull on the national average price.
“By contrast, activity in Toronto is stronger this spring than it was last spring. Higher-priced sales activity there is on the rise and buoying average prices. As the most active housing market in Canada, Toronto is the biggest factor supporting national average price. “Netting Vancouver out of the national average price calculation yields a 4.9 per cent year-on-year gain. Netting Toronto out of the national average price calculation, while leaving Vancouver in, produces a 2.2 per cent year-on-year decline. Netting out both Vancouver and Toronto results in a 3.1 per cent increase in average price. On balance, this points to modest price growth amid balanced market conditions in much of the rest of Canada.”
Diana Petramala, economist with TD Economics, said absent of an external negative economic shock, Canadian housing demand should remain supported by a continued low interest rate environment through 2012. “Still, growth in home prices and sales will likely be limited as the overvaluation has led to a deterioration in affordability,” said Petramala. “Overall, we anticipate the Canadian housing market to remain relatively flat in the coming year with home prices to rise just another two per cent this year, following gains of seven per cent in each of the last two years.”