Genworth: Calgary Average Prices To Rise 5.6% in 2014

After three years of varied periods of growth and decline across the country, the Canadian housing market is starting to stabilize, according to the latest housing report released by Genworth Canada.

Genworth is predicting that prices for existing homes will rise this year in 8/9 cities studied and in all nine cities by 2014.

Once again, the Prairies are experiencing the strongest growth in home pricing, propelled by strong economic growth, rising employment and sustained residential demand.

Calgary will see the greatest relative increase in housing prices over the next three years, with Edmonton and Winnipeg close behind. The rest of the metropolitan areas will experience more moderate growth closer to the national average.

Calgary Forecast

You can read the entire news release here.

6 responses to “Genworth: Calgary Average Prices To Rise 5.6% in 2014

  1. Hi Mike, some pretty optimistic assumptions in this report. Given the trumoil in the bond market, I am not all that positive that mortgage rates will be lower next year. Also no mention of turmoil in the Chinese credit markets and uncertainty about their economic growth. Australia is already impacted heavily and structurally, their commodities based economy resembles that of Alberta.

    It would actually be pretty surprising if the housing market hung on as is, thought the belief in realestate as an engine of continued growth is extremely entrenched with people.

    In the report, they have more normalized interest rates for 2017 but continued price appreciation for house prices? That is not likely to happen but time will tell. One positive for the market that no one mentions is that housing prices and the wealth effect is almost a political tool for those in power. Harper will not want to see the housing market crash before the next election so he may use various policies to keep this going. Perhaps, the tightenning of mortgage rules were designed to give them room later to re-inflate the market. Just some thoughts….

  2. This report most likely didn’t take into account the recent flooding in Calgary. It will be interesting to see if that will have an impact on the average price, etc.

  3. Jim, a case could be made for higher prices in the communities surrounding the affected areas as buyers switch gears and look for homes a little further away from the Bow River but still close to the core.

    Calgary was already in a low inventory environment and the flood will likely mean even fewer homes for sale. The sales to new listing ratio this month for SFH is at 74%, apartments: 72%, and townhomes: 87%. Some Canadian boards consider 55-60% ratio a seller’s market, so Calgary is deep in seller’s market territory right now.

    Aside from lack of inventory, the other thing that is going to have an impact on SFH sales & prices are the fixed rates that have been climbing over the past month (as Len alluded to in his comment). If this stretches affordability, buyers will turn to the comparatively more affordable condo segment which is what’s happening looking at the Townhome statistics.

    In any case, CREB will be releasing a revised forecast on Friday which takes into account the flooding.

  4. Here’s an update to Genworth’s forecast from today’s Calgary Herald:

    Robin Wiebe, senior economist with the Centre for Municipal Studies with the Conference Board of Canada said the forecast has been rendered moot.

    “Making a call at this point about the housing market out there is speculative and that’s not our business,” he said.

    “We would prefer to wait until the dust settles and evaluate it when the water recedes and see how things look after that,” he said.

    Read the entire article here

  5. Hi Mike:

    What exactly is the average house price number in Genworth’s forcast? I checked that with your statistics, it doens’t seem to fit any price there.

    Thanks

    Ed

  6. Hello Ed,

    They use “Calgary CMA” like CMHC does. See page 8 of the report to see similar average prices used: click to view

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