By Mario Toneguzzi, Calgary Herald
CALGARY – Overall residential MLS sales and average prices rose in Calgary in February, according to the Canadian Real Estate Association.
In data released Tuesday, CREA said Calgary sales, which included all residential properties, were 1,917 for the month, up by 0.2 per cent from a year ago. The average MLS sale price was $400,879, an increase of three per cent from February 2010.
Sano Stante, president of the Calgary Real Estate Board, said the local real estate is currently fairly strong – fairly buoyant. “We’re just starting to see some job growth in Calgary and a lot more consumer optimism,” he said. “So we have seen an increase in sales over last year year-to-date but mostly in the lower-priced properties which indicates that first-time buyers are moving into the market which provides us with a base of sustainable growth this year.
“When first-time buyers come into the market it provides the fuel for sustainable growth for a market comeback and that’s what we’re starting to see. We’re building the foundation of this comeback in the market.” Stante said there has also been an increase in the number of listings which is moderating the average sale price. “We still have an abundance of listings. Sales are healthy but the average price is not going to increase because the increased number of listings is keeping the price in check,” he said.
Nationally, CREA said sales dropped by 5.9 per cent to 34,093 transactions but the average sale price rose 8.8 per cent year-over-year to $365,192. “The average price has been skewed higher nationally and in British Columbia recently by a record number of multi-million dollar sales in a couple of areas in Greater Vancouver,” said Gregory Klump, CREA’s Chief Economist. “When you take Vancouver out of the equation, the year-over-year increase in the national average price drops to 3.4 per cent. While that’s still stronger than in the past six months or so, national average price gains may recede after tighter mortgage regulations take effect in March.”
Doug Porter, deputy chief economist with BMO Capital Markets, said Canada’s housing market looks to be moderating again, although prices are holding up well. “Tighter mortgage rules and reduced affordability will weigh, with rising global uncertainty also potentially dampening consumer confidence in the near term,” he said in a research note. Also in a research note, Pascal Gauthier, senior economist with TD Economics, said outside Calgary and Vancouver, forthcoming mortgage changes did not result in a rush to buy prior to those changes taking effect.
“Canada’s housing market is re-establishing its comfort zone after having experienced strong bouts of volatility over the last three years,” said Gauthier. “Although sales are expected to ease in most parts of the country as interest rates rise – the Prairies could be the exception – activity should be strong enough to provide a floor under home prices. By the same token, better availability of new and existing units will provide more balanced markets than seen in pre-recession years. This will make hard for home values to outpace general inflation over the next couple of years.”