Local housing sales booming: City market tops the nation for growth

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Calgary’s resale housing market had the country’s biggest annual gain in October as a slight national sales slowdown continued. The Canadian Real Estate Association, in releasing its monthly MLS data Thursday, said Calgary sales rose 27 per cent from October 2011 to 2,104 transactions. Nationally, sales dipped by 0.8 per cent.
Robert Kavcic, economist with BMO Capital Markets, said population and income growth continued to support housing demand in Calgary.
“This has helped draw down the excess supply built up during the prior boom – the market is now close to full-scale sellers’ territory,” he said.
The average sale price in Calgary also outpaced the national average, rising by 5 per cent from a year ago to $418,721. Nationally, the average price remained stable at $361,516.
“Markets in Alberta and Saskatchewan are gaining strength, while some of Canada’s traditionally most active markets have lost steam,” said Wayne Moen, president of CREA.
Gregory Klump, chief economist at CREA, said national sales in October were on par with the same month last year and in line with the 10-year average for the month.
“These results suggest that the Canadian housing market overall has returned to a more sustainable pace,” he said.
In Alberta, total sales of 4,815 in October were up 17.5 per cent from last year while the average sale price rose by 3.5 per cent to $363,295.
CREA also reported Thursday that its MLS Home Price Index, which follows a benchmark price, increased by 3.6 per cent from last year across the country in seven major markets, the sixth consecutive month in which the price gain slowed and is the slowest rate of increase since May 2011.
Regina recorded the highest increase at 12.98 per cent followed by Calgary at 6.76 per cent.
Sonya Gulati, senior economist with TD Economics, said housing market trends in Canada for 2012 can be characterized as before and after regulatory changes.
“In the first half of the year, sales and price gains were modest, but positive. More stringent mortgage rules and tighter mortgage underwriting rules have purposely knocked the wind out of the housing market sails,” she said.
“While regulation is having the intended impact on the housing market, it typically has only temporary staying power. The cool down we are currently experiencing should be lifted in early 2013. What happens thereafter is less certain.”