Alberta Housing Starts to Increase in 2012-13

Posted on February 2, 2012 | 2 Comments

According to Scotia’s Global Forecast report released today, Alberta housing starts are expected to increase this year & next.

Meanwhile housing starts in Saskatchewan, Manitoba, Quebec, Ontario & the Atlantic are expected to decline from 2011′s levels and BC starts will remain flat.

Nationally, starts are expected to total 184,000 and 178,000 units, respectively, in 2012 and 2013.  That’s down from the 194,000 starts recorded in  2011.

Source: Scotia

Alberta’s Economy to Outperform the Rest of Canada

The report also states:

Alberta’s labour market has heated up, with stronger employment growth now forecast for 2012 at more than double the national pace. In several sectors, labour shortages and cost pressures are surfacing.

Exports of oil, wood products and minerals should continue to sustain the region’s outperformance, though Western Canada remains sensitive to global growth prospects.

Read the entire report here

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Airdrie MLS® Listings 46% Unoccupied

Posted on February 2, 2012 | 3 Comments

If you’re looking for a quick possession home, take a look at Calgary’s northern neighbor city: Airdrie.

Of the 301 currently active SFH & condo listings, 139 of them are unoccupied – either new construction or resale that is vacant.  Of the unoccupied SFH, half of them are new construction including some homes built by Nuvista which received 5/5 overall satisfaction in J.D. Power’s 2011 rankings.

Below is the breakdown:

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ATB: Housing Demand & Demographics

Posted on February 1, 2012 | Leave a comment

A new report from ATB looks at generational trends and migration levels and how it will impact future housing demand in Alberta.

The report points out that while migration is a key source of new blood, “domestic demographic dynamics play an equally important role.”

Highlights of the report:

  • Over the past decade, roughly 350,000 new homes were built to accommodate 700,000 more Albertans
  • Natural rate of house-hold formation (i.e. housing demand without migration) in Alberta is 19,000 today and will drop to 12,000 by 2020
  • Total net migration of 45,000 annually is needed to offset reduced housing demand from the aging population
  • Net international migration doubled between 2000 and 2010 to 20,000

Conclusion

In a boom/bust economy like Alberta’s, there can be great volatility from year-to-year, which makes it difficult for the construction industry to match supply with demand.

Yet, common and predictable patterns remain—the most obvious being that children born will eventually move on to start families of their own. This is the natural rate of household formation.

While the household formation rate is influenced by economic conditions and housing affordability, causing either occasional surges in demand or weak periods, it tends to even out in the long run. This is why given assumptions on birth, death and migration rates, a rough estimate of the natural rate of housing demand can be made.

Clearly the trend towards smaller families, which started decades ago, will have an impact on the housing market. This isn’t to say it will cause a glut in housing or a precipitous drop in prices, as it’s hard to say how the market will adjust. The most plausible scenario would simply see new housing activity slowdown, which would have its own implications for the local economy.

One cannot escape the fact that even in Alberta the population is slowly aging; going forward, the province will come to rely increasingly on migration as a source of population growth and new housing demand.

These migrants might certainly be coming given buoyant projections for Alberta’s energy sector, but we shouldn’t hold our breath expecting the real estate market to take off like it did in 2006 unless we see in-migration begin to rise precipitously

Read the entire report here

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January 2012 Calgary Real Estate Statistics

Posted on February 1, 2012 | 3 Comments

Metro-Calgary SFH

Despite being buttressed by record low fixed rates, single family home sales in January were unable to match year ago levels.  A total of 773 homes were sold, with an average price of $438,683 and a median of $395,000.

Year-over-year this represents a -1.4% decline in sales, -3.3% drop in average price, but a +1.3% increase in the median.

A total of 15 homes sold for $1M or more compared to 24 in January 2011.

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Metro-Calgary Condominiums

Condo sales were able to eke out a year-over-year increase with a total of  305 units changing hands, compared to 302 in January 2011.   The average price was $268,526 with a median of $245,000.

Year-over-year sales were up +1%, the average price was down -6.9% and the median declined -3.9%

At first glance, the y/y average price drop of nearly $20,000 seems significant.  However if  we were to remove the $4.1M transaction from 01/11, the month-end average price would have been $275,627 (instead of $288,291)  In either case, the median in January 2011 would remain unchanged at $255,000.

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Don Campbell Postpones Alberta’s “Real Estate Frenzy” to 2013

Posted on January 31, 2012 | 2 Comments

Last April, Don Campbell elicited headlines with his ‘Wake-up Alberta Tour’ where he proclaimed that without question Alberta would see a ‘real estate frenzy’ the following year.

Below is an excerpt from April 16, 2011 Calgary Herald:

“Alberta is 18 months away from a real estate frenzy,” says the author of the bestselling book, 97 Tips for Canadian Real Estate Investors. “There’s no question the frenzy is coming here.”

The economic conditions in Alberta are the reasons why -and it will hit Calgary first and foremost, he says.

Now he says 2012 will mark ‘a lot of people dumping properties into the market.’  The next logical development of course being increased housing demand in 2013.

Alberta forecast begins at the 7:23 mark

Transcript:

“Calgary & Edmonton’s real estate markets have not moved, they have barely moved actually over the last 12-16 months. At the same time population’s grown, at the same time average incomes have gone up, at the same time vacancy rates have gone down, and at the same time rents have gone up. You know what’s going to happen next, you absolutely know because you paid attention to the economic fundamentals, that demand on that housing market – on the resale and new homes – is going to start to take off. It’s going to start to take off in 2013, not 2012, because in 2012 you’re going to see a lot of people dumping properties into the market that they bought what they believe is at the wrong time.”

How accurate have his forecasts been? CLICK HERE, and be sure to read the comments as well.

 

Related posts:

November 2011: For Posterity
July 2011: When Average Just Isn’t Good Enough

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