Average annual compounded rate of return 7.7%
By Mario Toneguzzi, Calgary Herald
CALGARY – Calgary homeowners earned among the highest compounded rate of return for real estate between 2000 and 2010, according to a report released Tuesday by Re/Max. The report said the average residential price in the city grew from $176,305 in 2000 to $398,764 last year – an annual compounded rate of return of 7.7 per cent. That bested the national average of 6.82 per cent. Across Canada, Re/Max, in its Housing Barometer report, said residential average prices went from $164,091 in 2000 to $339,030 in 2010.
Lowell Martens, of Re/Max Real Estate Mountain View in Calgary, said the report indicates that as a long-term investment real estate has been “relatively stable” in the local market. “Just from the standpoint of holding value,” he said. “There’s a sense of stability to the market which is good.”
The Re/Max report said home sellers in Calgary were firmly in the driver’s seat for the majority of the decade at 47 per cent, while balance prevailed for 36 per cent of the period. Purchasers, meanwhile, held the advantage 17 per cent of the past decade, largely concentrated from 2008 to 2010. At the national level, the real estate company said balanced conditions prevailed 49 per cent of the time with seller’s conditions 41 per cent of the time and buyer’s conditions 10 per cent of the time.
According to the Calgary Real Estate Board, average MLS sale prices for a single-family home peaked in July 2007 at $505,920 and for condominiums in May 2007 at $332,237. Last month, average sale prices in Calgary were $454,163 for single-family homes and $288,291 for condos. “Calgary’s residential real estate market remains balanced heading into the new year,” said the Re/Max report. “Prices have firmed up for the most part as cautious optimism in a strengthening recovery is driving buyers off the sidelines.
“Multiple offers have re-emerged but have been limited to homes priced at fair market value in choice neighbourhoods. Overpriced listings continue to stagnate as purchasers have the luxury of time to make their decisions. The easing of in-migration over the past three years has allowed local buyers to make their moves with less competition.”
Meanwhile, in a new report also released Tuesday, the Canadian Real Estate Association is forecasting MLS sales in Alberta to increase by 5.9 per cent this year to 52,650 transactions and by another 5.0 per cent in 2012 to 55,300 units. This comes after a 13.6 per cent annual decline in 2010 to 49,723 sales.
As for the average MLS sale price, CREA predicts a 1.4 per cent drop in the province in 2011 to $347,300 followed by a 1.4 per cent rise in 2012 to $352,300. In 2010, the average price rose by 3.1 per cent to $352,301. CREA is predicting the average sale price across the country will increase by 1.3 per cent this year to $343,300 and by another 1.3 per cent in 2012 to $347,900. This followed a 5.8 per cent hike in 2010 to $339,030.
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