New Housing Price Index (NHPI): March 2011

Posted on May 12, 2011 | 2 Comments

For the first time since January 2010 the New Housing Price Index (NHPI) registered a year-over-year decline for Calgary, albeit a small one.   New Home Prices in March were down 0.1% from the previous year as well as the previous month.

Canada-wide, the NHPI was unchanged in March.  Year over year, the NHPI was up 1.9%.

Between February and March, prices rose the most in Saint John, Fredericton and Moncton (+0.4%) followed by the metropolitan regions of Toronto and Oshawa, Winnipeg and Regina (all three registering increases of 0.3%).

In Saint John, Fredericton and Moncton as well as in Toronto and Oshawa, builders reported that price increases were a result of improving market conditions.

In Winnipeg, the increases were primarily due to higher material and labour costs, while in Regina, higher land development fees contributed to the rise in prices.

The most significant monthly price decreases were recorded in Québec (-0.7%), Windsor (-0.6%).  In Québec and Edmonton, some builders reported that the decreases were attributable to lower land costs. Slower market conditions caused builders in Windsor to reduce their prices.

The largest year-over-year increase was observed in St. John’s (+6.2%), followed closely by Regina (+6.1%). Compared with March 2010, contractors’ selling prices were also higher in Winnipeg (+4.5%) as well as in Toronto and Oshawa (+3.6%).

Windsor (-4.6%), London (-1.7%), Greater Sudbury and Thunder Bay (-1.3%) and Victoria (-1.2%) posted 12-month declines in March.

(click to enlarge)

You can view previous NHPIs here:

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Out-of-Province Agents

Back in November, I cautioned sellers using out-of-province agents that they weren`t getting the exposure they thought they were on MLS®

That`s no longer an issue now that the provincial regulators have caught on that unlicensed agents were posting listings across borders.

In Alberta, here is RECA`s stance on the matter:

RECA’s review of “mere posting” services has concluded that a person involved in providing a “mere posting” service in Alberta for a seller is trading in real estate and requires an authorization pursuant to the Real Estate Act.

Read more on their blog)

Of course some discount brokerages have taken this back to the Competition Bureau.    However this doesn`t have anything to do with CREA anymore.   The Provinces each have real estate regulations that everyone has to abide by.

I know agents that have both BC and Alberta licences in order to legally work in both provinces.   The fact that some discount brokerages have taken umbrage by this is laughable.    Other large-scale discount brokerages have teamed up with licensed agents in different provinces in order to be able to post legally on MLS®.

Discount brokerages have always existed, and will continue to exist.   But everyone has to play by the same rules.

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2 Responses to New Housing Price Index (NHPI): March 2011

  1. Mike Fotiou | May 13, 2011 at 11:08 am |

    A little more on first-time buyers since we’ve been discussing it recently:

    “First-time buyers make the home sales world go around, playing an important role as buyers in the newly-built market, and also in purchasing existing homes so that the sellers can buy another home, often in the new home market,” says the Altus Group.

    Read more in the Calgary Herald

  2. Mike Fotiou | May 14, 2011 at 7:02 am |

    Quotable:

    “I don’t see any reason for why we are where we are with this market” says a Calgary broker.

    “It could be a seller’s market by the end of this year or early in 2012,” he says. “Alberta is a hell of a place to live -mortgage rates are still low and now we have a majority federal government. Things are looking up.”

    Following a recent address to a forum by Scotiabank in Calgary, he put the current reduction in sales and consumer interest down to two factors -grumpy people being one of them.

    “It was the lingering winter,” he says. “People got grumpy with all the snow and cold and a lot of them just wouldn’t go out -and you couldn’t blame them.”

    The other element related to the slow market is a change in the way properties are marketed, he says.

    Historically, when homes were being listed for sale, agents would shop the neighbourhood to see what similar homes sold for.

    These days, though, that’s not happening in many cases.

    “Some in the industry are being forced to list homes relative to what is listed in the area -and not what has sold,” he says.

    But the market has bottomed in terms of sales, he says.

    Read more in the article: Sellers`market possible by end of year

    While I sometimes criticize CREB for forecasts since they are supposed to be representing me and my colleagues, I tread lightly when it`s other agents. We are all entitled to our opinions and need to be respectful of them. I have to ignore a lot of the comments made on Twitter (“OMG. The calgary market is so hot right now!”) But I can`t believe the weather excuse got trotted out again. Jeepers.

    So, can we expect a sellers market by the end of the year? Perhaps. Has the market bottomed out? Perhaps. But when someone makes the same call time after time…

    Calgary Herald, July 2007

    He has good news for people shopping Calgary’s resale housing market — the volatility that was so evident for much of 2006 is over.

    The rapid escalation in prices, and the shortage of properties that led to thousands of multiple offers and sales being confirmed just hours after being posted, are no more.

    A sense of normalcy has returned to the marketplace.

    But that does not mean prices have flattened, says -, broker/owner of -.

    Prices are expected to continue to climb.

    Of course prices didn`t climb any further as prices peaked that month.

    Calgary Herald, October 2007

    After average prices eclipsed $500,000 that summer, prices started trending down:

    I have no idea what the problem is, because there is no problem economically,” he says. “People are still coming here, we have plenty of jobs and there are lots of homes for sale.”

    Calgary Herald, December 2008

    While prices and sales continue to fall in Calgary, he figures the market has bottomed out in the city that surpassed Toronto as the second-most expensive place to buy a home during this housing cycle. “We have people putting ridiculous offers in on a home and nobody is selling. People are saying `l’ll wait for prices to drop.’ It’s not going to happen,” he says.

    Calgary Herald, November 2009

    It is showing signs of leaning towards a sellers’ market —again. “We’re a lot closer to a sellers’ market than to a balanced one,” he says

    SFH inventory absorption rate that month was at 2.4 and rose continually higher to 6 month supply by that following summer.

    Calgary Herald, July 2010

    An intense buyers’ market has Calgary’s real estate market in a state of flux, but a turnaround could come soon. According to real estate veteran —, balance will return to the market later in the year and a sellers’ market may be in place before the first quarter of 2011.

    —, who owns — Realty of Calgary, said he does not understand why, despite an upturn in upscale home sales, the entire resale market is under-performing. — commented that expensive homes are not typically purchased in a troubled economy, and that Calgary’s financial situation is certainly not desperate.

    Evidence of the market’s imbalance is that there are around 11,000 homes currently for sale in the Calgary area, with fewer than 2,000 sales transactions having occurred in June. — said that he expects a drop in excessive inventories and a rise in sales. These two factors will stimulate buying among people who have been on the fence.

    — does not believe that Calgary will suffer due to economic problems existing in other parts of the world. He believes that the market will begin to heat up after July. Increases in the creation of jobs, as well as an upsurge of newcomers to the city will spur buying.

    Calgary Herald, January 2011

    “Real estate activity in the Calgary market is down slightly year-over-year with average listings in all housing types selling slightly lower than asking price. However, we witnessed multiple offers occurring in the market in the final quarter of 2010 as buyers began to realize that house prices aren’t going to continue to fall in 2011.”

    “With good interest rates, a strong economy and a rebounding energy sector, the trend in Calgary’s real estate market is expected to pick-up in both prices and the rate of sales,” he added.

    Newswire, May 4, 2011

    “Our markets are stable across the country and it would appear that recent activity in this market place has increased substantially. We should start seeing an increased variety of listings and increased sales activity like we have seen in other major Canadian cities to date.”

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