CALGARY — New home prices in the Calgary region were on the rise in October, according to Statistics Canada.
The federal agency reported Thursday that the New Housing Price Index was up 0.3 per cent from September in the Calgary census metropolitan area.
On an annual basis, it rose by 2.4 per cent.
Nationally, prices increased by 0.2 per cent month-over-month and by 2.4 per cent year-over-year.
mtoneguzzi@calgaryherald.com
Twitter:@MTone123
CALGARY — Prices for repeat home sales in Calgary rose from a year ago, according to the Teranet-National Bank House Price Index released on Wednesday.
In October, Calgary prices were up 3.5 per cent compared with October 2011 while prices at the national level rose by 3.4 per cent in the 11 markets surveyed.
The index is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.
On a monthly basis, however, prices were down by 0.2 per cent in both Calgary and across the country.
In Canada, it was the 11th consecutive month of deceleration in 12-month inflation.
The index was also the third October monthly decline in 13 years of data, including 2008 when the country was on the verge of recession.
David Madani, Canada economist for Capital Economics, said the recent decline in the sales-to-listings ratio points to home price stagnation ahead in Canada.
“Overall, we still standby our view that Canada housing market is due for a 25 per cent price correction,” he said in a research note. “Home prices have held up so far, prompting economists to declare a soft landing. But we think this is premature.
“We think the pace of home price appreciation generally speaking will stagnate early next year.”
mtoneguzzi@calgaryherald.com
Twitter:@MTone123
CALGARY — Strong employment growth in the Calgary region has sparked more people from other parts of the country to move here, buoying the local housing market for the next two years.
According to Canada Mortgage and Housing Corp., net migration to the Calgary census metropolitan area will balloon to 20,000 people this year after numbers dropped to 9,209 in 2010 and 11,220 in 2011. And the CMHC is forecasting net migration to the region to be 18,000 in 2013.
“With the relative strength of our labour market, the growth of employment and a low unemployment rate will help attract people to Calgary,” said Richard Cho, senior market analyst in Calgary for the CMHC on Tuesday as the agency held its 19th Annual Alberta Housing Outlook Conference in Calgary.
“Net migration is a key component to housing demand . . . Whenever you have an influx of people come to a region you’re going to see some strong demand for housing in the rental market as well as in the homeownership market.”
Net migration to the Calgary region peaked in 2006 as it approached 25,000 people.
Those net migration numbers will help boost MLS® sales by 15.7 per cent this year in the Calgary CMA to 26,000 transactions and by another 1.9 per cent in 2013 to 26,500 sales.
The CMHC is forecasting average MLS® sale prices in the Calgary region to rise by 2.0 per cent this year to $411,000 and by another 2.7 per cent next year to $422,000.
Total housing starts are estimated to rise by 33.4 per cent this year to 12,400 units but dip by 4.0 per cent in 2013 to 11,900.
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CALGARY — Total housing starts in the Calgary region are forecast to finish this year up more than 33 per cent from the previous year, according to Canada Mortgage and Housing Corp.
In its latest Fall 2012 Calgary Housing Market Outlook, released Monday, the agency said total housing starts in the Calgary census metropolitan area will increase to 12,400 units this year before moderating slightly to 11,900 units in 2013.
This year’s level is the highest since 2007.
“Supported by low mortgage rates, strong job growth, and a sharp increase in net migration, demand for new homes in Calgary will remain elevated over the next two years,” said Richard Cho, senior market analyst in Calgary for the CMHC. “Supply in the competing resale market and inventories of new multi-family units have also declined from their previously elevated levels, further contributing to the pace of construction.”
Single-detached starts are forecast to finish 2012 with 5,700 units, up 12 per cent from 2011 levels.
“Demand for new homes will continue to improve in 2013 as prospective buyers and migrants take advantage of Calgary’s labour market, and some existing homeowners capitalize on their equity gains and move-up,” said Cho.
He said a large proportion of the new construction is taking place in the north and south ends of the city where there are a higher number of newer communities.
“With the increase in new construction activity and the decline in the unemployment rate, it is taking more time for some home builders to fill their vacancy positions compared to a year earlier,” added Cho. “The higher demand for labour is also putting some upward pressure on earnings.”
Tim Logel, president and partner of Cardel Lifestyles, said the number of people moving to the Calgary region is a good indication of future housing demand.
“What we’ve seen the number of homes in Calgary new and used . . . the number of listings year-over-year is down and because of that you’re seeing shorter times for a home to sell,” said Logel. “You could see more demand next year with maybe the same amount of supply because of in-migration.
“Overall, there’s a level cautiousness with homebuyers . . . The customers are noticing there’s not as much to choose from as they would have had a year ago.”
Logel said the homebuilder is challenged by labour these days as there’s not enough skilled people to build the homes today.
“And we ask ourselves what would happen if the demand did pick up. What would happen if the supply would drop further? Then there would be increased pressure on new housing,” said Logel, adding the availability of good land is also a challenge.
In 2013, CMHC forecasts single-detached starts to increase four per cent to 5,900 units.
Multi-family starts in 2012 are on pace to reach 6,700 units. With the start of many new multi-family projects this year, the number of units under construction has also increased. Some of these units will represent additions to inventory when completed and will inhibit construction in 2013. CMHC is forecasting multi-family starts to remain above historical averages in 2013, but to moderate 10 per cent to 6,000 units.
Labour market conditions in Calgary have been favourable, attracting migrants from other regions and increasing housing demand, added the agency.
Existing home sales in Calgary are on pace to increase 16 per cent in 2012 to 26,000 units, the highest level since 2007. In 2013, modestly higher mortgage rates, combined with a slower pace of job creation and net migration, will moderate sales growth. MLS® residential sales are anticipated to rise two per cent to 26,500 units.
The average price for the Calgary region is forecast to increase two per cent from $402,851 in 2011 to $411,000 in 2012. Balanced market conditions are expected to persist for the remainder of this year and into 2013. The average price in 2013 is expected to reach $422,000, up almost three per cent from a year earlier.
mtoneguzzi@calgaryherald.com
Twitter:@MTone123
CALGARY - Record-breaking luxury home sales and a flood of high-end retailers into the city are just two indicators of Calgary’s growing wealthy population.
Recent statistics from Investor Economics Strategy Consulting show Calgary not only has more high net worth households than any other city in the Prairie provinces, but Calgary’s wealthy are actually richer, on average, than the wealthy in any other Canadian city. Looking only at households with a net worth of $500,000 or more, these wealthy Calgarians average out at a net worth of $3.3 million each. Toronto’s high net worth households average $2.2 million, while in metro Vancouver, the households that fall into that category have an average worth of $2.1 million.
Recently, the national head of a new BMO Private Banking Division — aimed exclusively at meeting the investment and estate planning needs of the ultra-rich — made a visit to Calgary to host information sessions for some of Calgary’s wealthiest.
“Clearly, there is an opportunity given the size of the market,” said Diana Reid.
Meghan Meger, Alberta Regional Director for the BMO’s Private Wealth Group division, said Calgarians in a high net worth position run the full spectrum, from professionals with young families to longtime, more senior Albertans.
“We are seeing second and third generations with even emerging fourth generation business families, from both the oilpatch and the cattle industry,” Meger said.
BMO is not the only organization taking notice of Calgary’s wealth. In the last couple of years, Chinook Centre shopping mall has welcomed a host of luxury retailers, from Louis Vuitton and Gucci to Tiffany’s, Michael Kors, and Burberry. In September, the mall announced that high-end American department store Nordstrom will be moving into space recently vacated by Sears.
Terry Napper, general manager of Chinook Centre, said there was a time when luxury retailers were only interested in the Toronto and Vancouver markets. One of the first high-end retailers to land at Chinook Centre was kitchen store Williams-Sonoma in 2007.
“It was very difficult for us to convince them that they should have a store in Calgary,” Napper said. “But we did that deal, we opened them, and they were amazed at the results. And of course, that word started to spread and our leasing team started to get inquiries from other similar retailers ... Since we’ve announced the Nordstrom deal, we’re getting inundated with these high-end luxury retailers that want to come to Calgary.”
Napper said Chinook Centre is on track to reach $700 million in annual sales by the end of 2012.
On the real estate scene, sales of luxury homes in Calgary’s resale housing market have already set a record this year. In October, Calgary hit 459 year-to-date MLS® sales of properties over $1 million, one more than the previous record set in 2007 for the entire year.
Last year, there were 446 luxury home sales in Calgary and in 2010, there were 365.
Corinne Poffenroth, a Realtor® with Sotheby’s International Realty Canada, told the Herald last week that her high-end inventory has had a record number of inquiries and interests in the last quarter.
CALGARY — Calgary and Edmonton have displaced Toronto and Vancouver as the top-ranked cities for overall real estate prospects, according to the Emerging Trends in Real Estate 2013 report released Tuesday.
The report, by PwC and the Urban Land Institute, said the Canadian real estate market is expected to remain steady with “modestly good” investment and development prospects across most property sectors for 2013, reflecting expectations of solid supply and demand.
Calgary was the top-ranked city in the country followed by Edmonton, Toronto, Vancouver and Ottawa.
In this year’s survey, Calgary ranked first in both investment and development prospects and second in homebuilding prospects.
“Growth characterizes Calgary’s future; it displaces Toronto as the top ranked city for 2013,” said the report. “This has made it challenging to acquire high quality real estate in Calgary, absorption of prime properties has reached record levels, and rents are being pushed due to limited supply.
“This trend will continue in 2013, especially in office and industrial employment space. Construction will increase in the housing and non-residential arenas, but nowhere near pre-crisis levels.”
According to survey participants, Canada’s real estate market will follow along in a seeming state of near-perpetual equilibrium compared with other more volatile regions studied in the report, including most obviously the United States.
“The results of this year’s Emerging Trends report reflects the fact that the Canadian real estate community understands real estate fundamentals and knows how to react to fluctuations in monetary policy and capital markets. Canada’s real estate industry continues to operate well despite uncertainties in domestic and global economies,” said Lori-Ann Beausoleil, PwC Canada’s Real Estate Leader.
The report said Calgary’s expanding economy is requiring a larger and more highly-skilled workforce. Employment forecasts indicate growth of 2.8 per cent next year and 2.9 per cent in 2014.
“This growth, driven mostly by the oil and gas industry, has made it challenging to acquire high-quality real estate in this market,” said the report.
“Absorption of prime properties has reached record levels and rents are continuing to be pushed due to limited supply.”
The report said potential approvals of controversial pipeline projects to the United States and into British Columbia would boost real estate construction projects further in Calgary.
The strength of Calgary’s real estate market is evident in both the residential and non-residential sectors.
According to the Calgary Real Estate Board, year-to-date as of Monday, total MLS® sales in the city of 18,905 are up 15.56 per cent from the same period last year.
Canada Mortgage and Housing Corp. is forecasting total housing starts in the Calgary census metropolitan area to finish at 12,400 units this year, an increase of more than 33 per cent from 2011 and the highest level since 2007.
RealNet Canada recently said Calgary has experienced the second best ever year for commercial real estate transactions for the first nine months of the year with $3.394 billion in sales so far this year.
And a recent report by Jones Lang LaSalle suggested a downtown office development boom in Calgary could be on the horizon.
Twitter:@MTone123
"Don't worry, major structural components are covered now!"
Currently, only three provinces, Ontario, Quebec, and British Columbia require newly built homes to be covered by waranties. Alberta will be the fourth if this new piece of legislation passes, and will also have the farthest reaching statute.
Some examples of how the proposed Alberta legislation will surpass the amount of protection mandated in other provinces are:
What is covered - British Columbia requires one year of coverage on labour and materials, but only on detached homes. The Alberta legislation covers condos and detached houses.
Length of coverage - In Ontario, the required warranty on major structural elements is seven years, whereas in Alberta, the proposed warranty will be 10 years.
Additional requirments - Ontario only requires two years warranty on the building envelope (walls, windows, foundation, and roof bascially), British Columbia requires fives years, and Alberta will require five years plus the requirement that builders offer buyers the opportunity to purchase additional warranty coverage.
Should the legislation pass, it would come into effect in the fall of 2013. I am also a specialist in new homes, so if you are interested in Okotoks, Calgary, and Chestermere real estate, give me a call some time.
Click here to read the entire press release from the Government of Alberta.
CALGARY — Vendors remained firmly in the driver’s seat as Calgary’s commercial real estate market exhibited strong momentum in the first half of 2012, according to the RE/MAX Commercial Investor Report released Wednesday.
“Consumer confidence remains high, given the city’s and province’s solid economic footing, which continues to be bolstered by a robust oil sector,” said the report. “Most segments of the market are active, with the retail, office and investment components particularly busy.”
The report said there has been a considerable uptick in U.S. retailers and national big-box chains setting up shop in the city, sparking serious competition among smaller retailers to secure good locations in close proximity to these anchors.
“The strong demand has some hoping to capitalize — Calgary’s Chinook Centre, for example, has just applied for a land-use amendment to expand its premises, combining a mix of residential, office and hotel space.”
The report said the office segment of the commercial real estate market is also exceptionally healthy, with Calgary’s downtown vacancy rate hovering around three per cent, while Class ‘A’ space is even tighter, running near one per cent.
“The strength has much to do with the active oilsands sector, which — with numerous projects on the go — is sparking an increase in demand for office and industrial space. While a growing number of organizations are establishing their corporate head offices in Calgary, many are opting to lease instead of buy in order to invest maximum capital in their operations,” said RE/MAX. “This suits investors just fine, as properties with solid long-term tenants command a premium. The downtown area and the Beltline that immediately surrounds the city are most sought after. Conditions are expected to remain tight, with very few projects underway.”
RE/MAX said demand for commercial real estate continues to climb across the country.
The report highlighted trends and developments in nine Canadian centres — Greater Vancouver, Calgary, Edmonton, Regina, Winnipeg, London, Greater Toronto, Ottawa, and Halifax-Dartmouth. It found that almost all markets saw an increase in commercial sales and dollar volume over the six-month period ending June 30.
RE/MAX said Canadian and foreign investors are behind the push, snapping-up apartment buildings and small strip malls given continuing low interest rates and a generally bullish tone for the Canadian economy. Private investors, in particular, have gained a serious foothold in recent years, spurring demand for entry-level properties such as multi-unit residential, suburban and urban retail storefronts, and smaller office buildings, it said.
“Given the appetite for tangible investments with long-term revenue streams and potential for appreciation, commercial real estate has been gaining favour and is expected to be a top-performer well into the new year,” said Elton Ash, regional executive vice-president for RE/MAX of Western Canada.
“Despite the enthusiasm, demand is unlikely to be satisfied while those same benefits are prompting owners/landlords to hold on to their properties, especially with the prospect of capital gains taxes down the road. It’s a push-pull situation, yet buyers are forging ahead, hoping to ride the wave of year-over-year double-digit equity gains a little while longer.”
mtoneguzzi@calgaryherald.com
Twitter:@MTone123
CALGARY — Calgary’s low retail vacancy rate, combined with continued strong consumer spending, has created a positive environment for new developments.
One of those is Strategic Group’s 20/20 project in Mission which will add about 20,000 square feet of retail space to the market by 2013.
“With retail vacancy rates as low as two per cent, and one of the fastest growing economies in the country, Calgary continues to attract strong interest from Canadian and American businesses who want to sell to the Calgary consumer,” said Ellisa Asaria, retail leasing associate with the Strategic Group. “In addition, because of Calgary’s high growth rate and consistently strong retail sales, many national and eastern franchises are looking to enter the Calgary market.
“We expect continued strength in the Calgary retail market as well as very low vacancy rates.”
The 20/20 project on 4th Street S.W., which is a 140,000-square-foot development with five floors of office space, is expected to be home to several unique retail stores and will be anchored by a restaurant and a financial institution.
According to the spring Colliers International retail report, the demand for new retail space in Calgary continues at a feverish pace as 24 projects, comprising 8.3 million square feet are either in the planning, permitting or construction stage.
Calgary and Alberta retail sales have been strong this year. In July, Alberta retail sales reached just over $5.7 billion with the highest year-over-year growth rate in the country.
According to Statistics Canada, retail sales in the province rose by 9.2 per cent from July 2011. They were also up 1.4 per cent from the previous month.
Also, KubasPrimedia forecasts retail sales in the Calgary region will surpass $28 billion annually by next year.
The Retail Sales Outlook Canada Q3 2012 report forecasts sales in the Calgary census metropolitan area to jump by 8.9 per cent this year to $26.3 billion and another 8.5 per cent hike in 2013 to $28.6 billion.
In Alberta, the report is forecasting sales to increase by 8.6 per cent this year to $69.5 billion and by another 8.2 per cent in 2013 to $75.2 billion.
In 2011, the Calgary CMA saw annual retail sales growth of 7.2 per cent while Alberta experienced 6.9 per cent growth.
Twitter:@MTone123
CALGARY — A “diminished” supply of single-family homes in Calgary has pushed MLS® sales upwards in towns surrounding the city, says the Calgary Real Estate Board.
On Wednesday, the board said sales activity in towns hit double-digit growth in the third quarter, continuing the brisk pace set in the first half of the year.
For example, MLS® sales in Cochrane were up 20.34 per cent in the third quarter compared with a year ago and year-to-date sales have increased by 24.70 per cent. Airdrie has seen quarterly growth of 31.16 per cent and year-to-date growth of 30.86 per cent while Okotoks has experienced increases of 21.32 per cent and 12.77 per cent on a quarterly and annual basis respectively.
“We keep seeing strong sales growth in the surrounding municipalities because, when it comes to single-family homes, the supply is down in Calgary proper,” said Bob Jablonski, president of CREB. “Plus, generally speaking, you can find more house at a more affordable price in these areas and other areas outside the city.”
Year-to-date town sales totalled 4,110 units, a 41-per-cent increase over the previous year.
The benchmark price for the typical home in Airdrie was $338,600 in September, the lowest of the top three surrounding areas and 22 per cent less than the benchmark single-family home in Calgary. Meanwhile, Cochrane was highest of the three towns at $388,600, but 11 per cent less than single-family homes in Calgary.
Twitter:@MTone123
This massive, near 400, 000 sq.ft, mixed use, luxury facility is being developed by Calgary based New Urban. The development not only brings recreational and commercial space to the area, but new park land is also part of the project.
The new ClubSport by Marriot International is a first in Canada. It's an interesting new development in the historic Warehouse District, and could be an additional draw for those interested in Chetermere real estate as they would pass by this location on the way to downtown Calgary.
With the new development located right on Macleod Trail SE, it could have implications for those looking into Okotoks realty. If you were communting into downtown Calgary everyday, this would be an ideal spot to stop and have a workout, go for a swim, a steam, and with Alberta being a major hotspot for US retailers looking to branch out, who know's who will occupy the 55,000 square feet of retail space. You can read the full article at the Calgary Herald.
We received multiple offers on my clients beautiful Airdie home today. I had the opportunity to work with a great Realtor® from Carter and associates! Cheers guys! So much fun!!
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