July 1-14, 2015 Calgary Real Estate Market Update

The Bank of Canada cut its key rate to 0.5% today despite concerns of Canadians accumulating even more debt or further stoking the already hot real estate markets of Vancouver and Toronto.

It’s welcome news here in Calgary where the market is seeing “signs of turning around, or at least stabilizing…[the] deep dive in new listings has helped re-balance the market and stem the price decline.” (Source: BMO)

TD has already reduced their prime lending rate, but by only 0.1%.  Other banks will follow suit with cuts of their own which will help nudge some buyers off the fence and spur additional activity.

Sales in Calgary remain below year ago levels but are balanced out by a reduction in new listings.  A total of 851 homes have sold through two weeks, down -16.57% year-over-year but off the 5 and 10 year average by only -5% and -2.3%.

New listings are down -10.59% from last July.  Compared to historical levels, they are up 0.48% from the 5 year average but below the 10 year average by -7.58%.

It’s shaping up to be a stable month which will benefit from the extra little push thanks to the Bank of Canada.

Calgary home sales - July 14 2015

Calgary home sales, July 1-14, Y/Y comparison

Calgary New Listings - July 14 2015

Calgary New Listings, July 1-14, Y/Y comparison

Calgary luxury home sales - July 14 2015

Calgary luxury home sales, July, Y/Y comparison

Sales to New Listings Ratio - July 14 2015

Sales to New Listings Ratio, July 1-14

Calgary Real Estate Stats Summary - July 14 2015

Calgary Real Estate Stats Summary, July 1-14, Y/Y comparison

6 responses to “July 1-14, 2015 Calgary Real Estate Market Update

  1. Scotia Economics:

    “Demand remains much more subdued in Alberta and Saskatchewan in the face of lower oil prices and reduced population inflows, through sales and listings appear to be stabilizing as buyers take advantage of greater selection and a more competitive pricing environment”

    (Source)

  2. RBC Economics:

    The recovery process in markets affected by the plunge in oil prices paused in June. Home resales fell slightly relative to May in Calgary and Edmonton, although not enough to disrupt demand-supply conditions which remained balanced, if slightly tight in the case of Calgary.

    …confidence appears to have returned in markets in Alberta and Saskatchewan where resales have picked up smartly since this winter’s lows and significant reductions have been achieved in the number of new listings.

    Two consecutive months of monthly price increases in Calgary are telling of more balanced demand-supply conditions and likely are sending a clear signal to market participants on both sides of the selling equation that this market is not heading toward a precipice.

    In Alberta and Saskatchewan, recovery from this winter’s low points is
    more vigorous than anticipated, thereby implying that overall declines for this year likely will be smaller—albeit still substantial—than forecasted in these provincial markets.

    (Source)

  3. BMO Economics:

    The prairies continue to face the toughest conditions in the wake of lower oil prices. Calgary, Edmonton, Saskatoon and Regina are all seeing sales well below last year’s levels, though they have also shown signs of turning around (or at least stabilizing) in the latest three months.

    In Calgary, a deep dive in new listings (-23.5% y/y) has helped re-balance the market and stem the price decline (the seasonally-adjusted HPI has actually held steady over the past two months).

    (Source)

  4. Hi Mike…thanks for the additional comments. I dont think the drop in rates will do anything for Calgary RE. People here are worried about their jobs, lower rates will do nothing to alleviate that. Crude oil is under more pressure which will be offset somewhat by a lower CAD. Unfortunately I think the next quarter will see steeper layoffs in the industry. Having said that…i am now thinking a steep drop in prices might not actually happen. Instead we will simply see no appreciation in housing for the next 5 – 8 years as wages (which are under huge pressure) will need to catch up to make housing affordable again. But who the heck knows!!
    thanks
    Curt

  5. Joe Winnipeg

    You guys are on drugs if you think houses will ever be worth more than they are today.The number one driver of house prices is interest rates, and unless Poloz completely torpedoes the loonie (although I wouldn’t put it past him), that’s it – we’re at the finish line of what Flaherty called the race to the bottom. Once Yellen begins to raise rates in September, that’s it, Canada has no choice but to start following suit, or say goodbye to the loonie. All these people in TO and Van taking out 800k mortgages at 2% (even the banks won’t follow the BOC anymore in lowering rates further) might have to come out at 3 or 4% – and that’s it.

    As for Calgary, well, oil just crashed through 50 bucks again, so I’m not exactly sure who is moving to Alberta as you can no longer get work in the oil patch, in construction, or barring that, become a real estate agent. Once you take away those 3 industries – all of which are tied to oil – there’s no reason to be in Alberta for most people. Back to New Brunswick they’ll all go.

    And as Curt estimates, a 5-8 year stagnation of house prices is almost as bad as a price drop. That’s 8 years of dead money. Take 500 grand and, with an average market return of 8%, kiss 320K goodbye in lost profits had you just invested that money in the market somewhere. I took the 200K I made on the sale of my house in Rocky Ridge back in 2010, invested it wisely in the market and now have well over a million in net worth. Yeah I rent. Gasp!!
    Run from Canada’s real estate market while you can.


    Rocky Ridge benchmark price has increased by over $100,000 since June 2010 (25.6%), not bad for someone that doesn’t have the acumen to match your “400%+” ROI.
    -Mike Fotiou

  6. Joe Winnipeg, would you show a couple of tips on how you made to well over a million from the 200k since 2010? If you invested in a diversified protfolios, I see no way you will make such return as you claimed.

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