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CREB® commentary: Strong gains in Calgary’s condominium apartment and townhouse sectors sparked a 3.4 per cent year-over-year growth in residential resale housing sales activity for August.
A total of 2,267 units exchanged hands in the city during the month, compared to 2,192 during the same period in 2013. The condominium apartment and townhouse sectors saw the biggest gains, increasing by nearly 14 and 20 per cent, respectively, for total monthly sales of 790 units.
“The record pace of August sales in the condominium sector is related to the relative affordability of this product combined with a tight rental market and low lending rates,” said CREB® chief economist Ann-Marie Lurie, noting most of the activity continues to take place in lower price ranges. “More than 76 per cent of condominium new listings are priced below $400,000 and represent more than 68 per cent of the total inventory within city limits.”
So far this year, condominium apartment and townhouse sales have totaled a respective 3,388 and 2,685 units. This represents a combined increase of nearly 20 per cent.
“Over the past three months apartment-style new listings have increased by more than 40 per cent year over year, pushing up overall inventory levels and moving this market toward balanced territory despite the strong sales growth,” said Lurie.
Meanwhile, year-over-year single-family sales declined by 2.4 per cent in August to 1,477 units, partly due to limited availability in lower price ranges. Despite the pullback, activity in the sector remains stronger than long-term averages. “The decline in single-family sales is mostly due to the shrinking supply in the under-$400,000 sector,” said CREB® president Bill Kirk. “Overall, sales activity has improved compared to last year for product priced over $400,000.”
The good news for buyers is added choice. New listings in August improved by 13.6 per cent compared to last year, causing inventories to rise by nearly 18 per cent.
Increased inventory levels also moved the single-family market toward more balanced conditions, helping minimize further monthly price gains. The single-family unadjusted benchmark price totaled $512,300 in August, similar to July, but still 10.24 per cent above $464,700 posted a year ago.
“Following a prolonged period of Calgary being a sellers’ market, a move toward more balanced conditions is welcome news,” said Kirk. “This will help support a more stable city housing market in terms of price gains.”
The average, median and benchmark prices for condominium apartments in August were a respective $332,006, $287,500, and $298,200.
“While both average and median prices in this sector have recorded further monthly gains, the benchmark indicates prices are similar to levels recorded in the previous month,” said Lurie. “The composition of apartment sales shifted toward the higher end segment this month compared to last month, resulting in higher monthly gains. The benchmark price reflects price changes for similar properties, less subject to the variability in composition.”
Condominium townhouses remain the tightest of the three sectors in Calgary, resulting in further monthly price gains and reaching an August benchmark price of $328,300. While prices are shy of previous highs, they increased by 0.4 per cent over the previous month and nearly 10 per cent above levels recorded in August 2013.