Download the entire report: here
CREB released the 2013 mid-year update yesterday and similar to CREA’s forecast, sales and prices had to be revised upwards because of the continued strength of the market. It seems that Calgarians have simply shrugged off the greatest credit tightening that Canada has ever seen and are continuing on like normal.
Below is the summary and flood impact statement, but be sure to download the entire report for more insight.
Calgary’s economy is well situated to outperform many other Canadian cities, as the resource-based industry finds resolution of transportation and market access issues. Despite short-term risks, overall economic conditions support employment opportunities that will attract migrants and support long-term growth in the Calgary housing market.
Given the economic backdrop and no imminent concerns regarding overbuilding in the city, both sales and price gains are expected for the rest of this year.
Potential Impact of Flooding
Calgary and other southern Alberta communities recently experienced flooding that is being described as the worst on record for this part of the province.
The economic impact the floods will have on our city and province cannot be estimated until the full extent of the damage is known, but it is likely economic growth will be somewhat slower than previously projected. Smaller businesses, in particular, and the tourism industry will feel the effects.
While some industries will benefit from reconstruction work, the economic impact tends to be negative following these types of events. The extent of the damage to homes is not fully known.
However, we know that the evacuated communities represent approximately 14 per cent of the city’s housing stock, of which approximately 700 units were listed on the resale market before the flood. It is not clear how many homes were damaged and the extent of the damage.
Listings are expected to drop in these areas as property owners assess damages and repair costs. With fewer properties in the market, sales activity in the affected areas will also decline. This could, in turn, increase demand in surrounding areas that were not flooded.
Before the flooding occurred, Calgary’s housing sector was in seller’s conditions. And, while the floods will impact the affected communities, overall sales growth for the city is not expected to stall.
In 2005, the City of Calgary indicated that 40,000 homes were affected by the flood, but there was no significant change in values. The extent of the damage is expected to be far greater this time, and that will have a greater impact on short term pricing.
Longer term, many of these communities remain desirable and consumers will continue to weigh the benefits of the locations versus future flood risk. Price growth citywide is also expected to remain in line with current expectations. Any short-term price adjustments for affected neighbourhoods will be outweighed by price growth in the unaffected communities.