By MARIO TONEGUZZI
CALGARY – The Calgary Real Estate Board is forecasting a slow recovery for the market this year, but improved sales compared with 2010.
In its annual forecast released Tuesday, the board said Calgary’s housing inventory levels are expected to stabilize, resulting in an eventual return to a more balanced and sustainable housing market.
It forecasts single-family home sales to increase by 19.9 per cent this year to 14,500 transactions while the average MLS sale price is predicted to rise 4.1 per cent to $480,000.
In the towns outside of Calgary market, the board is forecasting a 13.5 per cent increase to 4,000 with the average price increasing by 2.6 per cent to $368,500.
“We’ve been hit fairly dramatically in the last year and so 20 per cent (for single-family homes) really is relative to the drop that we’ve had in the last year,” said Sano Stante, president of the real estate board, adding his forecast wouldn’t change in light of the federal government’s announcement Monday to toughen up mortgage lending practices.
“What we’re expecting is in-migration into Calgary. So if we see the job growth that we expect to happen in Calgary then the in-migration should occur and that should drive the sales.” The key to market recovery in 2011 will be permanent job creation sufficient to stimulate in-migration, said the forecast report. With little pent up demand from renters, recovery in the first half of the year will be more modest, picking up pace in the latter half. Recovery of sales will come to single family homes closer to the downtown core, followed by condos and single family homes in the outlying towns, said the report.
“Affordability will be key to market expansion and price increases are not likely until the latter half of 2011 when inventories have eased and demand has recovered,” added the report. “With interest rates not expected to increase, there is little urgency for buyers to move into the market in the first half of the year. Nonetheless 2011 will offer buyers unprecedented affordability, low interest rates and a large selection of inventory.”
“With more activity in the energy sector that should help support employment growth and that will strengthen demand for housing,” said Cho. “We’re expecting to see improvements from the year before but more so in the latter half of the year compared to the first half of the year. The CMHC, in its forecast, predicted MLS sales, which includes all residential properties, in the Calgary census metropolitan area to increase by 2.0 per cent this year to 20,700 units, while the average sale price will rise by 0.5 per cent to $401,000.