How To Calculate Property Taxes For Calgary & Airdrie Homes

In order to calculate how much property tax you would need to pay for a particular home,  the two values you need are the property assessment value and the tax rate.

This will come in handy when browsing MLS® because 1,925 of the 5,280 homes currently listed in Calgary are showing 2013 (or older) tax amounts.  One listing is showing 2007’s tax amount – as if that’s helpful.

Calgary Property Taxes

To find the assessed value of Calgary property click here
Once you have the value, multiply it by the tax rate of the current year.
For Calgary residential in 2014, the total rate is 0.0061029.

Airdrie Property Taxes

To find assessed value of an Airdrie property click here.
Multiply it by the tax rate of the current year
For Airdrie residential in 2014, the total rate is  0.00651392.

property assessment X tax rate = property taxes

Hope this helps!

September 1-14, 2014 Calgary Real Estate Market Update

Freak snowstorms, falling trees and power outages didn’t dissuade Calgary buyers from home shopping.  It’s been busy! With 941 sales through two weeks this month, we’re on pace for a September sales record.

Month-to-date average and median prices are up y/y across all three housing categories, but fortunately the gains have been tempered with the influx of new listings and added inventory.  Aside from SFH average prices (which can easily be skewed due to the booming luxury segment), there aren’t any other double-digit percent increases.

This is a good thing since Calgary is once again on bank radars due to rapidly increasing house prices.  A research note released today by BMO states in part:

“The major potential flashpoint is that prices in the three hottest
cities—Calgary, Toronto and Vancouver—are rising faster than family income, further straining affordability. The continued rapid price gains in these cities will increase their vulnerability to a shock—whether economic, interest rate, or something else.”

Sales-to-new-listings ratio

Calgary home sales September 1-14, Y/Y comparison

Calgary home sales September 1-14, Y/Y comparison

Calgary luxury home sales September 1-14, Y/Y comparison

Calgary luxury home sales September 1-14, Y/Y comparison

Calgary Stats Summary

Calgary Real Estate Stats Summary (click to enlarge)

Canadian Housing Market Report: August 2014

Download the full CREA statistics report for August: here

August 2014 Report Highlights

house• National home sales rose 1.8% from July to August.
• Actual (not seasonally adjusted) activity stood 2.1% above August 2013 levels.
• The number of newly listed homes fell 1.2% from July to August.
• The Canadian housing market remains in balanced territory.
• The MLS® Home Price Index (HPI) rose 5.3% year-over-year in August.
• The national average sale price also rose 5.3% on a year-over-year basis in August

Bank Commentary

RBCRBC Economics: The August data suggest that the effect of the decline in fixed mortgages earlier this year may still fuel homebuyer demand at this stage, particularly in stronger markets such as Toronto, Calgary and Vancouver, which also benefit from favourable ‘fundamental’ factors such as rapidly growing populations (largely driven by strong in-migration). While brisk activity should be positive in theory, Canada’s housing market may be at risk of overheating if recent trends persist. We note that price increases—even though stable from July—continue to run ahead of disposable household income growth (3.9%), thereby adding to affordability pressures that are already quite intense in certain markets such as Vancouver and Toronto. Nonetheless, we expect that the market will resume its transition to lower resale levels—closer to the long-term average—and that the rate of price increases will moderate during the coming year. (Read full commentary pdf )

TD

TD Economics: A 30 basis point drop in mortgage rates earlier this year have delivered households an offer they can’t refuse. With mortgage rates at record low levels, housing affordability has improved. Cuts to interest rates of that degree have typically boosted sales by 30 to 40% over a six month period, which suggests the momentum may continue into October.

We continue to be surprised by the lack of listings on the market. The sales-to-listings ratio has moved back to the level reached at the end of last year, when prices were growing 8% to 9% year-over-year.  This suggests that following four months of moderation, home price growth may catch a second wind through the fall months. (Read full commentary pdf)

BMO Economics: The major potential flashpoint is that prices in the three hottest cities—Calgary, Toronto and Vancouver—are rising faster than family income, further straining affordability. The continued rapid price gains in these cities will increase their vulnerability to a shock—whether economic, interest rate, or something else. The persistent strength in these cities is no doubt what prompted the Bank of Canada to stop talking about the inevitability of a soft landing for Canadian housing, and to suggest that the sector has been stronger than they expected. But we would reinforce the message that talk about the “hot housing market” is really only a 3-city story (Read full commentary pdf)

CREA Updates Resale Housing Forecast For 2014/2015

CREA forecast update

CREA forecast update (click to enlarge)

The Canadian Real Estate Association (CREA) has updated its forecast today  from the previous one released back in June.  I’ve combined the figures from that release with today’s for an easy side-by-side comparison (See chart above)

CREA boosted Alberta’s sales outlook for this year from 68,600 to 71,200.  In 2015 sales are now predicted to reach 71,900, up from 69,300.

Average prices are also expected to increase slightly more than previously thought.  CREA projects that the average price in Alberta this year will now reach $400,200, up $900 from June’s forecast while only a 1.9% increase to $408,000 is in store for 2015.

You can read CREA’s forecast update here pdf

Who Is Responsible If Neighbour’s Tree Falls Into My Yard? (And Others FAQs)

What a crazy week of weather we’ve had!  I hope you all are safe and weren’t too inconvenienced by the tree related damage and power outages.

The clean up is now in full swing.  Since September 9 until 10 a.m. this morning, Calgary 311 has received a total of 33,593 phone calls and 2,904 Service Requests submitted by 311’s online form and mobile app.  Below is a heat map of 311 calls related to the Snow Event and damaged tree calls from that period.

Source City of Calgary (click to enlarge)

Source: City of Calgary (click to enlarge)

The City of Calgary continues to have crews cleaning up debris in communities and are advising us to stay out of all parks as “dangling tree branches and sagging trunks pose a major safety hazard that could cause injury to pedestrians or cyclists passing under them.”  (Source)

Most helpful is the webpage the City has created answering all your tree clean-up related questions.   For example:

Who is responsible if my neighbour’s tree falls into my yard or mine falls into theirs? Who is legally responsible to cut it up and clear the debris?

This is an issue between two private property owners. If damage to your property has occurred, please contact your insurance company. If one of the neighbours (property owners) was on notice regarding a previous concern related to the tree, they would need to coordinate with their lawyer on how to proceed.

I live in a condo complex. Do we get tree debris curb side pick-up?

Multi–unit dwellings that are not served by The City for residential garbage or recycling pick up (condo, townhouses, apartments) will not receive curb-side tree debris pick up. Please contact your residents’ association to ask about the plans for your complex clean up or take your tree debris to a City landfill.

To read all the questions and answers posted, click here

Were you affected by ‘Snowtember’?  The lights flickered a few times and some trees and bushes around my home are looking a little sad and droopy but thankfully no major damage.

Low Interest Rates Spurring House Sales, But For How Much Longer?

Historically low mortgage rates have stimulated home sales nationwide and in turn have renewed pressure on house prices.

In the August release of the Teranet-National House Price Index, only Quebec was down slightly on an annual basis (-0.1%).   Compare that to just a few months back in April when there was y/y house price deflation in Victoria, Halifax, Montreal Quebec and Ottawa.

Calgary price growth led the nation yet again in August, this time posting a 7.9% y/y increase, followed by Hamilton & Toronto (6.7%) and Vancouver (6.1%).

Teranet HPI August 2014

(click to enlarge)

However, National Bank warns that this “acceleration in house prices is not likely to be sustained, with higher mortgage rates looming in 2015.”

TD echoes the same sentiment in their research note: “Looking ahead, a moderate employment picture and gradually rising interest rates suggest that the accelerating trend in home price growth may not be sustained.”

While it’s prudent to warn consumers about future rate hikes and caution them about the impact it will have on the housing market, nobody knows when that will happen.  Take a look at some forecasts made years ago about interest rates:

There’s growing speculation that June 1 [2010] will be the day the Bank of Canada begins the coming cycle of interest-rate increases. Whenever this happens, it’s back to the real world for variable-rate mortgage holders
-March 30, 2010, Globe & Mail: The end is nigh for low-interest-rate heaven

BMO’s economics department expects that interest rates will rise. “The era of historically low mortgage rates is coming to an end,” said Sal Guatieri, Senior Economist, BMO Capital Markets.
-March 31, 2010, Newswire: Rates Are on the Rise- Get Pre-Approved This Week

We expect the Bank of Canada to increase the overnight rate starting in June, with the pace of increases being fairly steady through the remainder of 2010 and 2011, which will continue to put upward pressure on borrowing costs
-RBC, May 2010

“Author Garth Turner, a noted pessimist on the fortunes of housing these days, thinks those who want to be in the market for a house should probably be grabbing on to long-term products. He says the banks know the housing market is already shrinking and are scrambling for a larger share of the mortgage market.  “The writing is already on the wall, prices will be declining,” Mr. Turner says. “The Bank of Canada will be raising rates.”
-March 27, 2012, Financial Post: Mortgage rates have nowhere to go but up

Over the medium-term, interest rates will likely rise at least 2 percentage points and there is no doubt that a significant minority of Canadian households will be at-risk when this occurs
-TD, May 2012, Are Canadians Prepared For Higher Interest Rates?

Going forward, we expect home prices to be about flat or likely declining in certain markets. The pressure going forward is not going to come from prices per se, but is going to come from rising interest rates.
-RBC, August 2012

Calgary Land Supply Restrictions Drives New Home Prices Higher

New housing prices in Calgary were up 0.2% between June & July according to the latest New Housing Price Index released by Statistics Canada this morning.  On a year-over-year basis, Calgary prices increased a nation-leading 6.9%.

Statistics Canada reports that among the 21 census metropolitan areas surveyed, 6 posted 12-month price declines in July: Vancouver (-1.8%), Charlottetown (-1.6%), Ottawa–Gatineau (-1.3%), Victoria (-0.9%), Halifax (-0.3%) and Edmonton (-0.1%).

Y/Y % change in July

Y/Y % change in July

With Alberta’s economy on solid footing, it’s interesting to note how new home prices in the two largest cities in the province are performing so differently.

“Edmonton, however, continued to show no increase [on a month-over-month basis],” writes Todd Hirsch, chief economist with ATB.  “Its index was unchanged at 91.1. The index sets prices in 2007 equal to 100. That means new residential prices in Calgary are higher by nearly ten per cent compared to seven years ago, while Edmonton new home buyers are seeing prices about nine per cent lower.”

Mr. Hirsch explains that the diverging price trends are “odd given that new data show Edmonton’s population growth is outpacing Calgary’s. More people moving into the capital region should, in theory, boost housing demand and drive prices higher.”

So why have Calgary new home prices been steadily rising over the past several years while Edmonton prices are still about 9% lower than they were in 2007?

“The gap between the two cities can be attributed to higher land and building costs in Calgary,” writes Mr. Hirsch.  “Land for residential development in and around Calgary has been somewhat restricted. This has limited the supply for home builders and boosted price.”  (Source)

This is evidenced by the chart below.  In the past few years, the cost of a house has increased “due to higher material and labour costs as well as good market conditions.”  Land costs have, for the most part, remained elevated and are trending higher.

(click to enlarge)

(click to enlarge)

Source: Statistics Canada

Source: Statistics Canada (click to enlarge)