RBC released their latest Housing Trends and Affordability report today which covers the fourth quarter of 2011. Below is what they had to say about Calgary and Alberta:
Calgary – Despite being one of the more affordable housing markets in Canada and enjoying an economic renaissance, the Calgary area has been unable to sustain any meaningful momentum in home resales last year. After showing an encouraging start, Calgary home resales stayed mostly flat for the rest of the year, ending with a marginal quarterly decline in the fourth quarter.
The lacklustre performance was surprising given the strength in the area’s labour market—31,000 net new jobs were created in 2011 (a 4.4% increase)—and that housing affordability was the best it has been in the last six years.
In the fourth quarter, the RBC affordability measures fell for all housing categories, with declines ranging between 0.2 and 0.7 percentage points, to levels well below long-run averages for the most part. Strong market fundamentals will help the Calgary market turn a corner in the period ahead.
Alberta — Attractive affordability unable to spur buyer interest
Alberta homebuyers were hesitant to pull the trigger in the fourth quarter of 2011, but it was not about lack of affordability or job prospects.
Home resales growth slowed noticeably in the Alberta market in the final three months of 2011, yet the affordability of owning a home in the province became even more attractive. Price declines in all housing categories contributed to pulling the RBC affordability measures down by 0.5 to 0.7 percentage points and to their lowest or second-lowest points since 2005. While slowing a little from the third quarter, job creation remained quite robust in Alberta.
We believe that the strong labour market—the total employment gain in 2011 (99,000) was the best on records dating back to the mid-1970s—and attractive affordability will work to dissipate any hesitation on the part of Albertan homebuyers in 2012.
You can read the entire report here