CMHC: Calgary Prices & Sales to Increase in 2011

According to CMHC’s Housing Market Outlook – 2 QTR released today, Calgary sales are forecast to increase 4.8% in 2011.  Prices are also expected nudge upwards by a little over 1%.

Here are some of the excerpts from the report regarding Alberta:

Economic growth in Alberta is projected to outperform the national average this year and next, thanks largely to elevated oil prices. Drilling activity has been higher this year and is expected to improve over the forecast period, as a result of rising sales of provincial crown petroleum and natural gas rights. While activity in the oil sands will benefit from a low natural gas price, the natural gas industry itself will be hampered by elevated inventories and low pricing. On the trade front, higher energy exports will also help Alberta’s economy expand this year and next.

Resales: Resales across the province’s major markets have generally showed improvement in 2010. Going forward, housing markets across Alberta will benefit from employment growth and new household formation. Almost all of Alberta’s major centres are projected to experience a higher level of resales this year.

Read the entire report here

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How does this forecast compare to the one exactly a year ago?  Below is the most recent forecast:

2011 2QTR Forecast (click to enlarge)

And here is the forecast from exactly one year ago (2nd QTR 2010):

CMHC 2QTR - 2010 (click to enlarge)

Let’s take a look at the 2010 forecast and final numbers first.

MLS® Sales
2010 Forecast:  25,000
Actual:  20,996
Difference:  -16%

MLS® Average Price
2010 Forecast:  $403,000
Actual: $398,764
Difference: -1%

The price forecast quite accurate, however the sales forecast was off significantly.

Now let’s see how the forecast for 2011 has changed over the past year:

2011 MLS® Sales Forecast
2010 Report: 26,000
2011 Report:  22,000
Difference: -15%

2011 MLS® Price Forecast
2010 Report: $418,000
2011 Report:  $403,000
Difference: -3.5%

Looking at Sales, Prices, Single-detached housing starts and NHPI you can see that they start with aggressive forecasts and then revise them closer to reality as the forecast year approaches completion.  The one exception I found in the 2 reports was in 2010 they underestimated the total of multi-family starts.

Here are the other CMHC Housing Market Outlook reports available:

6 responses to “CMHC: Calgary Prices & Sales to Increase in 2011

  1. Here are a couple other posts going back a year or two regarding CMHC and their forecasts.

    CMHC Housing Forecast For Calgary (May 2010)

    CMHC Alberta Forecast (February 2009)
    (Forecast examination begins half-way down post)

  2. Do you make a combined income of $75,000 but don’t have enough money for a downpayment? That’s no problem for some BC residents who were given $45,000 to get started (and didn’t have to pay back) :!:

    More than 20 Okanagan families are officially homeowners thanks to a unique project billed as the first of its kind in the country.

    Project Build reaches out to working class people with steady jobs who have not been able to save money for a down payment on a house.

    People submit applications through the Central Okanagan Foundation.

    Those selected receive a $45,000 grant to put towards a new home in the Sageglenn subdivision in Lake Country.

    The money is raised through businesses that take part in the program; realtors, builders and trades people all donate some of their proceeds back into the project.

    Homeowners do not have to pay back the down payment but they are required to pay all the closing costs of the sale, including HST on their new home.

    Project Build has already built and sold 28 homes in the Sageglenn subdivision and has 12 more available.

    The comments are quite enlightening as well.

    Read the article here

  3. Renting v. buying your home: an affordability check
    Globe & Mail, May 30, 2011

    Renters are slackers, the conventional thinking goes. If they had any brains and ambition, they’d own a house. Today, in some parts of the country, just the opposite is true. Smart people are renting instead of owning.

    Renting doesn’t have to be a permanent choice and, in fact, it probably shouldn’t be for most people. But renting temporarily to avoid making an unfortunate leap into today’s housing market can make good sense.

    Read more

  4. Are Albertans really better off with their higher wages?
    ATB Financial Economist, Will Van’t Veld
    May 2011

    There’s a certain spinning of tires that occurs when the economy heats up in Alberta. The voracious appetite for labour drove wage growth over the decade, with the average hourly wage rate increasing 50 per cent. It sounds like an impressive increase, but it’s somewhat misleading as the higher costs faced by many private sector employers are passed on to consumers.

    Read the entire article here

  5. Interprovincial Migration To Alberta Set To Pick Up
    ATB Financial

    During the economic boom of the mid 2000s, Alberta saw a massive influx of interprovincial migrants. When the recession hit, the inflow of Canadians slowed and so far is yet to really recover. However, with the unemployment rate, wages, and housing prices all in Alberta’s favour, in-migration is set to pick back up.

    Read the article here

    In-migration to Alberta will probably return to around 20,000 migrants per year by 2013, up from less than 7,000 in 2010. Also, there is a possibility that if there another prolonged boom in the energy sector, interprovincial net migration could spike to as high as 35,000 migrants per year.

    One of the main sectors that would receive a boost is the Alberta rental accommodation market. People that choose to relocate permanently tend to be younger, less established individuals who are able to move without up-heaving significant roots. It is this demographic that is also the principle demander of rental accommodation. Considering this, the rental vacancy rate, which is currently averaging around 4.5% in Alberta’s main cities, could fall steadily. Rental rates, which have also fallen during the last couple of years, could experience some upward pressure as demand rises.

    The Alberta housing resale market will also receive a bit of a pick-me-up. It is unlikely that the surge of migrants will be enough to push housing prices up significantly; however, it will boost the number of sales and help offset some of the downward pressure on home prices from rising interest rates.

    Read the entire report the article is based on here

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    CREB featured that report in this weeks CREN paper

  6. Mark Carney holds rates steady, for now

    Bank of Canada Governor Mark Carney held his benchmark interest rate steady at 1 per cent Tuesday, pointing to continuing global threats and the dampening effect of the strong Canadian dollar on exports, but signalled that he’s also watching closely for an opportunity to begin tightening monetary policy.

    Read more in today’s Globe & Mail

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