Metro-Calgary Single Family Homes
- Average price increased 3.86% from last month to $458,254. (Up 10.27% from February 2009)
- Median price increased 3.26% from last month to $411,000 (+9.6% from February 2009)
- 1035 sales recorded (February 2009: 825)
- Inventory increased 23.75% from last month to 3106 (-28.5% from February 2009 month-end)
Metro-Calgary Condo
- Average price increased 0.08% to $282,880 (+5.17% from February 2009)
- Median price increased 0.35% from last month to $265,900 (+6.4% from February 2009)
- 536 sales recorded (February 2009: 343)
- Inventory increased 24.5% from last month to 1741 (-15.7% from February 2009 month-end)
Taking a closer look at the vacant/and or new construction levels of condos currently on the market – we see it accounts for 39.9% of what’s currently listed. Over 1 in 3 condos that are listed are currently unoccupied, and it has been that way for several years now as seen below:
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After a volatile few years, condo prices seem to have been holding quite steady within the last 12 months or so with the median barely deviating from the $260k’s.
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Last year condo inventory peaked in February with 2065.
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Canadian Real Estate & Calgary Condos
Stats released today show that the Canadian economy continued to expand in the 4th quarter, increasing the odds that the Bank of Canada will raise rates this July. The HST will be introduced in BC and Ontario at this time as well, reducing affordability levels even further. Not to be forgotten are the tightened mortgage rules coming into effect next month. I doubt there would have been nearly as many vacant condos in the Calgary market if the 20% down rule on “speculative” properties was introduced at the peak of the buying frenzy. Instead it comes at at time when many investors are trying to sell.
What needs to be pointed out is that Vacant/New construction numbers I post daily only includes those that are listed on MLS. According to the Altus Group, there are about 2000 unsold units.
“Some larger projects that are completed or nearing completion have large numbers of unsold units, and in some cases had few or no sales in 2009,” said the report. “Based on average monthly sales in 2009, the unsold inventory would take almost three years to absorb.”
AltusGroup said a big contributor to the unsold inventory is the large number of projects started with less than 50% of units sold. (Source: February 10, 2010, Calgary Herald)
The fact that condo prices have remained steady with little or no gain might be cause for concern with the various affordability reducing events that are due to come in the next short while.
-no more 5% down investors – 20% minimum
-increased rates + must qualify at 5-year fixed (still yet to determine which rate is to be used)
-Glut of new units competing against resale
-Over 1 in 3 condos on MLS unoccupied
Then again, we are just coming out of a recession whereby prices shouldn’t be expected to be increasing anyways…
What are your thoughts on the Calgary market, specifically condos, in the coming months & years?
