The Calgary housing market is expected to have another year of growth in 2014, with sales and prices going up, CREB® said today in preparation for its annual housing forecast.
Sales growth in the city is expected to be 3.6 per cent, said Ann-Marie Lurie, CREB®’s chief economist. Strong migration levels over the past two years have combined with strong employment and wage growth to support further gains in sales next year, said Lurie. Prices are expected to increase 4.3 per cent.
“Both sales and price growth exceeded our expectations in 2013,” said Lurie. “Stronger than expected demand was related to higher than expected migration and employment growth, while the tight rental market got tighter following the floods,” she said. “Meanwhile, supply levels didn’t keep pace with rising demand, which pushed the market to favour sellers and created stronger than expected price growth.”
Becky Walters, president of CREB®’s board of directors, said that while growth levels will ease from the double digit levels recorded this year, activity will remain above long term trends for the city.
“The price growth in the market has also encouraged growth in new listings,” said Walters. “As of November, the citywide benchmark price totaled $424,600, pushing above unadjusted previous highs,” she said. “While not all communities have seen full price recovery, rising prices and tight market conditions have encouraged sellers to list their home.”
Economic conditions continue to remain favourable in 2014, said Lurie. Tight market conditions will likely persist over the near term, but rising listings and increased competition from the new home sector should alleviate supply pressure and push the market toward more balanced conditions in the later part of 2014.
“This combined with potential increases in long term lending rates should take some of the steam off the exceptionally strong price growth of eight per cent, which we’ve recorded so far this year,” said Lurie.
While growth is expected in 2014, said Lurie, there is considerable risk in the energy sector.
“If market access issues persist for the energy sector, and further softening in global economic conditions continue, it would likely impact investment activity and employment opportunities,” said Lurie. “This affects confidence and ultimately housing demand. However, if there’s positive progress made regarding market access, it could boost consumer confidence and support stronger than expected housing growth.”
CREB® will release its full forecast at its annual conference on Jan.15, 2014.