The following is an update while we’re awaiting the April month-end review in just a few days:
Inventory
- Inventory Absorption rate for homes under $500,000 in Calgary are now between 2.2-3.4 months, smack in the middle of a “balanced” market territory. We’ll have April’s complete month-end absorption rate in just a few days.
- Last April, there was a SFH month-end inventory of 6881. Currently: 4282 (-2599)
- Last April, there was a Condo month-end inventory of 3214. Currently: 2091 (-1123)
- Last April, there were 1794 Vacant/New Construction SFH’s listed. It’s currently at 1068 (-726)
- Last April, there were 1185 Vacant/New Construction Condo’s listed. It’s currently at 716 (-469)
House Price Index
Canadian home prices in February were down 4.1% from a year earlier, according to Teranet–National Bank National Composite House Price Index™ newsletter that was released today.
Of the six constituent city indices, four were down from a year earlier: Calgary (−8.1%), Vancouver (−6.4%), Toronto (−5.0%) and, new to the list, Halifax (−0.5%). While prices were still up from a year earlier in Montreal (3.2%) and Ottawa (2.8%), the 12-month increase in those two cities has decelerated markedly in recent months. For Calgary and Vancouver it was the eighth straight monthly decline.
We’ll have the April month-end MLS numbers in a few days for comparison to last year .
|
Metropolitan area |
Index level |
% change m/m |
% change y/y |
From peak |
Peak date |
|
Calgary |
154.28 |
-0.7% |
-8.1% |
-12.0% |
2007- Aug |
|
Halifax |
116.97 |
-0.5% |
-0.5% |
-4.0% |
2008 – Nov |
|
Montreal |
120.58 |
-1.2% |
3.2% |
-1.6% |
2008 – Sep |
|
Ottawa |
113.76 |
-0.2% |
2.8% |
-3.8% |
2008 – Oct |
|
Toronto |
106.75 |
-3.1% |
-5.0% |
-9.0% |
2008 – Aug |
|
Vancouver |
135.27 |
-2.0% |
-6.4 % |
-10.2% |
2008 – Jun |
|
National Composite |
121.16 |
-2.0% |
-4.1% |
-7.4% |
2008 – Aug |
Employment Situation in Calgary
“The number of Calgarians receiving employment insurance doubled in just one year, with more than 11,700 now on government assistance after losing their jobs. The number of EI recipients in Alberta rose by 67.9 per cent from October 2008 to February 2009, according to newly released figures from Statistics Canada. Across the country, Alberta experienced the sharpest increase in workers claiming EI, followed by British Columbia, Ontario and Saskatchewan.” – Calgary Herald April 29, 2009
Even with mounting job losses, Albertans are still cashing the highest paychecks in the country. The average weekly wage rose 2.7% in February. Earnings are up 5% from a year ago. Average Alberta wages are about 7% higher than the rest of the country.
“Not only are Albertans enjoying the fastest pace of earnings increase in the country, the gap between earnings in Alberta and everywhere else is widening,” said Todd Hirsch, chief economist with ATB Financial in Calgary.
In a poll conducted last week of just over 1000 people, 50% of those polled believe this is a ‘mild recession’, with 38% regarding it as ‘severe’. 40% were optimistic of a recovery within in the next year, with 26% expecting it to get worse. Pollster Jeff Walker said the results suggest the recession hasn’t hit most individuals in day-to-day pocketbook issues. (Source)
Interest Rates
Interest rates are at historic lows, with 5-year fixed in the 3-4% range and variable rates even lower. Earlier this week, Canada’s central bankers that they intend to leave the benchmark lending rate at a record low of 0.25 per cent for as long as a year. (Source)
Sales
Last April there was a total of 1363 SFH sales and 581 Condo sales. As of April 27th, there were 1132 SFH and 514 Condo sales recorded for April.
Hi Mike
I am the first to admit my prediction of a spring dive rather than a spring bounce for the calgary housing market was incorrect. However, predicting the level of government intervention in the housing industry and mortgage market was not possible right after Christmas. Nor was it easy to predict the level of success the media and industry would put into pumping real estate through biased articles. Basically what is happening now is delaying the inevitable – perhaps the market will tank even heavier than I expected later this fall, or perhaps it will linger on until rates increase to where they should be (in my view at least double where they are now). Funny that being a renter and a saver I now see that the government has declared war on me and I see the bank of canada as my enemy. What a bizarre and mismanaged country we live in when people who ‘do the right thing’ are punished by the government. My advice to prospective buyers right now is to sit tight and put some money into stocks with dividends, energy trusts or preferred bank shares so at least you can get more than 1% on your savings.
I agree. The constant bombardment of the media makes it seem like Calgary’s market is great – and if you don’t buy right now you are losing out on an opportunity of a lifetime and that it is eminently affordable.
Calgary is way overpriced; housing should not cost 10x income… how can I afford that? Bah!
I will agree that the constant image of Bonnie Wegerich in the paper stating that the market is not so bad has served as soothing for those who believe the papers. I was sadened to see a young family in the paper a number of weeks back who purchased a house in the new development in Airdrie who expressed little if any concern about selling their home since they had lot’s of time but nothing about the price they needed to get for their existing house in order to cover the cost of their new home. People will buy houses though, either because they have to or feel they need to, regardless of market conditions, either by disconnect of what is happening in the market place or necessity.
I personally don’t see the spring as a bounce but rather a slump or better yet a bear market rally. I don’t know how sales volume being down as much as they are year over year over year, and sales prices being down year over year over year can be a positive. Sure April is expected to be better than March, but that is a short term perspective of a seasonal expectation. Traditionally March, April, May and June are the peak months for sales volume, if we are in the middle of peak sales volume for the year then the rest of the year may prove to be interesting times in the housing market. Also worth noting that the last time oil was at the level is is currently the average price of a house was in the $280k range, also natural gas is at a low I have not seen since starting trading companies participating in that market in the late 90′s.
Welcome from oilsands. I don’t care what is
says Bonnie Wegerich but for April 30/2009
situation up north VERY,VERY BAAAAAAD!!!
Moreover it wiil not improve in 2009 ,2010. and we will see house market 2-3 month from now. Spring is spring!!!!
MEDIAN SFH in Calgary….
(cumulative month to month performance)
Jan 2008 – April 2008: +3.03%
Jan 2009 – April 2009: 0.00%
AVERAGE…
Jan 2008 – April 2008: +5.89%
Jan 2009 – April 2009: +1.64%
AVERAGE PER SQ FT …
Jan 2008 – April 2008: +3.94%
Jan 2009 – April 2009: 0.00%
It’s interesting to me that the median and average per sq ft have been perfectly flat since the beginning of the year.
There really was no ‘bounce’ whatsoever this spring.
The median from Jan 2008 -> Apr 2008 = +3.03% cumulative performance.
April to December 2008 = -9.20%
If 2009 is anything like 2008, it’s the second half of the year that will truly tell the tale.