Calgary Home Sales Show Diverging Price Trends

The Calgary real estate market was downgraded to “seriously unaffordable” by the 9th Annual Demographia International Housing Affordability Survey that was released last week (download report here)

The report said Calgary “experienced a substantial increase” from the year before as its median multiple jumped from 3.9 to 4.3 in the third quarter of 2012 (Read Calgary Herald article here)

The sales shift to higher end homes (and skewing the average price up with it) can be explained by another report, this one from Statistics Canada, showing Calgary tax filers are breaking into Canada’s top one per cent of income earners more than double the rate they were over 20 years ago (Read HuffPost Alberta article here) and currently have a median income of $293,800.

It’s no surprise then that Calgary is the most unequal city in Canada with regards to income disparity.

This can be nicely visualized by the looking at the sales chart below.   You can see that the percentage of home sales of $400k or more have increased year-after-year, while home sales in the sub-$400k category have seen decreases as a total of the sales mix.

The first-time buyer segment is vital to the overall health of the entire market.  This trend of fewer lower entry homes selling reflects that the market is getting less affordable to the average Calgarian.

(click to enlarge image)

(click to enlarge image)

2 responses to “Calgary Home Sales Show Diverging Price Trends

  1. We see a similar trend in the Saskatoon market. Part of it can be attributed to rising prices as opposed to a disappearing first time buyer. What was $250,000-$300,000 in 2009 may be $300,000-$350,000 now. That said, there were some pretty significant changes from 2011 to 2012 that indicate fewer buyers exist at the entry level. Whether that will be significant enough for a market shift remains to be seen.

  2. Thanks for your comment, Norm. You’re definitely right – rising prices are also changing the sales mix, it’s not just prospective first-time buyers that have been pushed to the sidelines.

Please feel free to post your comment or question

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s