Calgary Entry Level House Prices to Drop 8%

A brief research note released by City of Calgary Corporate Economics says that entry level homes will be most impacted because of the new mortgage rules.

The report states:

The Calgary housing market has two active sectors, entry level and move-up level.

Low priced entry level housing will be affected most by this mortgage rule change. We anticipate a price drop in the below $300,000 market of about 8% as a result of this mortgage rule change.

Houses valued at or above $450,000 should experience little downward pressure while houses priced over $700,000 will experience none.

We anticipate it will take the construction market about 18 months to adjust to the new rules.

By the end of 2013 we anticipate about 200 more units of multi / condo units will be produced than previously expected with about the same number of single family homes as prior (albeit smaller more austere single family).

A faster growing job market in Calgary and Alberta should lessen the impacts of this policy on the local economy.

You can read the entire report here

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