With the plethora of forecasts and research notes being released, I missed the following offering from RBC last week- “Canadian home resale market forecast update: Still heading toward moderation”
- Out of the provinces, the Alberta market is expected to record the strongest growth in existing home sales in 2011 and 2012, however the effect on prices will be felt only next year, as property values in the province are expected to appreciate marginally this year.
- The Alberta market is expected to lead the way with growth rates of 7.0% and 6.2% in 2011 and 2012, respectively. This would, however, represent only a partial recovery from the substantial drop of 13.6% in 2010. The forecasted resales levels of 53,200 units and 56,500 units this year and next will pale in comparison to the 72,000 average reached during 2006-2007 at the height of Alberta’s housing boom
- The combination of attractive housing affordability and the broadening economic recovery in Alberta will support stronger housing demand going forward.
- The annual average value of a detached bungalow in Alberta to increase 0.5% in 2011 and 3.7% in 2012. The 3.7% increase is the highest of any of the provinces.
To read the entire report, click here
FFWD article: “The Economy Is Great”
July 28, 2011
THE REAL REAL ESTATE NUMBERS
Meanwhile, Alberta leads the country in mortgage arrears (not making mortgage payments for three consecutive months or more), almost doubling the national average. “During the boom there was a bit of a frenzy to get in or, ‘I’m going to miss this opportunity,’” says Ann-Marie Lurie, senior economist for the Calgary Real Estate Board. “And it causes people to not make their best financial decisions.”
No kidding. If you were one of the 30,000 Calgarians who purchased a single-family home or condominium during Calgary’s real estate boom in 2007, there’s a very good chance you’re home is worth far less now than when you bought it. Median prices for single-family homes and condos have yet to recover from their frenzied highs.
Meanwhile, TD Bank is forecasting home prices across the country to decline by 10 per cent in the next two years — Calgary homes are predicted to drop 6.4 per cent, with Vancouver topping the chart at 14.8 per cent. A separate presentation by TD economist Derek Burleton deems Alberta’s housing as “overvalued.”
While some experts are calling for a dip in the Canadian real estate market, CREB economist Lurie takes a rosier view of this province’s real estate fortunes.
“There’s nothing that’s pointing to any significant price declines,” she says. “I would be concerned if we had out migration or if employment levels were still really low, but we’re seeing positive growth in employment and migration.”
Calgary to Escape Price Correction
Canadian Real Estate Magazine, July 28, 2011
So now is the right time to invest while house values remain relatively low, said Sano Stante, president of the Calgary Real Estate Board.
“With interest rates still low and prices having been adjusted, affordability is high so it matches what you would pay monthly for a rental in Calgary,” he told CRE Online.