Calgary home prices will continue to rise next year but at a slower rate according to CMHC’s recent Housing Market Outlook report released a couple days ago.
CMHC is predicting the average MLS® sales price for Calgary to increase 5% this year but then only 2.8% in 2015. Likewise, sales are expected to go from posting a 9.8% gain this year and then pullback to a 2.4% annual gain next year.
Frankly, price growth returning to just above inflation is welcome in my books.
Teranet-National Bank National House Price Index for July was also released this week. In Calgary, repeat sale prices in July prices climbed 8.2% – the highest annual gain in the cities tracked by the index.
“The headline national number tends to commonly hide the underlying dynamics of the housing market. Following a long period of overbuilding, cities like Halifax, Ottawa and Québec City now have high levels of unabsorbed inventories and new listings. As a result they have been on a declining price trend since the beginning of the year. Conversely, the lack of homes for sale in other major cities, especially in the single-family home market, appears to be a key factor in mounting price pressures. Calgary, which has led the way in price growth so far this year (8.8% year-to-date avg.), has an undersupplied market in both the single-family and condo categories.
“Over the medium term, we are still of the view that the housing market is bound to see a soft landing on the back of gradually rising interest rates and a moderate employment picture. In addition, there are a record number of new homes under construction, which once completed will increase supply
and help alleviate some of the price pressures. Even Calgary should see home prices cool to about 3% by the end of 2015.” (Source)