Courtesy of CREB
City-wide prices hold steady as labour market improves
City of Calgary, May 1, 2017 – Calgary’s housing market continued to show signs of stability in April. With improvements in the labour market and a balanced detached sector, city-wide benchmark prices reached $439,600 in April, similar to the previous month, but 0.90 per cent below last year’s levels.
“More jobs means less uncertainty for people who are sitting on the fence,” said CREB® president David P. Brown. “There also tends to be fewer people who need to sell when employment improves, and that can prevent inventory gains and further price reductions in the market. It’s a good scenario for sellers who are entering a spring market that’s in better shape than anything we’ve seen in recent years.”
While adjustments are still occurring in the apartment condominium sector, the detached segment of the market is improving across all price segments.
“Detached product has not faced the same supply pressure as the apartment sector,” said CREB® chief economist Ann-Marie Lurie. “Detached supply from new construction didn’t surpass previous highs. That helped prevent steeper price adjustments in the detached sector when demand eased.”
The relationship between sales and inventory will be a key driver for pricing in the months ahead. Total transactions improved to 1,917 units in April, while inventories totaled 5,495 units, pushing months of supply below three for the second consecutive month.
With sales up and overall market inventory down, months of supply has already pulled back from elevated levels recorded over the past two years. While activity continues to vary by location and product type, more balanced conditions will help to support overall price stability.
“Improvements in the employment situation were necessary to prevent further declines in the housing sector,” said Lurie. “However, economic recovery is still expected to be slow, impacting the pace and quality of job growth. Based on current expectations this should translate into a more prolonged period of recovery in the housing market.”
HOUSING MARKET FACTS
- Year-over-year sales activity has improved in each sector of the market. However, overall activity remains below long-term averages in most segments.
- Despite the year-over-year rise of detached new listings in April, overall inventory levels continue to remain 20 per cent below last year’s levels, keeping months of supply at 2.09.
- Growth in new condominium apartment listings continues to outpace growth in sales. This is leading to higher inventory levels and a month of supply that’s nearly six months.
- Oversupply in the apartment condominium sector is placing further downward pressure on pricing. In April, apartment benchmark prices totaled $269,200, which is 0.19 per cent blow last month and 4.23 per cent below last year’s levels. To date, apartment prices have contracted by nearly 12 per cent over 2014 highs.
- Semi-detached prices totaled $390,200 in April, a 0.15 per cent increase compared to last month and 1.72 per cent higher than prices recorded one year ago. Meanwhile, row prices totaled $305,900 in April, 0.59 per cent above
- last month, but 2.83 per cent below last year.
- Year-to-date sales activity has either improved or remained at the same level as last year in all districts except the NE. Much of this growth is fueled by improved detached activity.
- Within the detached sector, year-to-date benchmark prices have improved in the North West, West and East areas of the city compared to last year.
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