February 1-7, 2016 Calgary Real Estate Market Update

Next Monday, the newest mortgage rule changes come into effect requiring a minimum 10% downpayment for the portion of the house price above $500,000.   This has goosed Toronto’s real estate market further as buyers rush to purchase before the deadline.

The opposite scenario is playing out in Calgary.  Sales in the $500,000-$999,999 range were down -31% in the first week of the month, with only 66 homes changing hands compared to 96 a year ago.   Looming rule change or not, Calgarians have not been incentivized to buy.

Overall Calgary sales totaled 242, down -10% year-over-year. That’s the fewest sales to start the month dating all the way back to 1996.  Oof.

Calgary home sales - Feb 1-7 2016

Calgary home sales, Feb 1-7, Y/Y comparison

On a positive note, new listings are down -8% y/y and between the 5 and 10 year average for the month.  With 5,349 active listings, inventory is now only 3% above last year’s level.

Calgary new listings - Feb 1-7 2016

Calgary new listings, Feb 1-7, Y/Y comparison

CBC had an interesting article today on foreclosures: Jingle mail rears its ugly head in Alberta again; Federal government worried about Albertans making strategic defaults on their mortgages.

The CBC obtained this Alberta housing report from the Department of Finance through an access to information request; much is redacted: click to view pdf

Bearing in mind that the report was issued in August 2015 when the labour market was considerably better than now, the following excerpt is now especially pertinent:

“While weaker housing activity will affect prices, we believe that the potential for a significant price shock in Alberta will still largely be determined by labour market conditions.   However, up to May 2015 arrear rates in Alberta have remained near their lowest point since before the 2008-09 recession

Labour market weaknesses are especially relevant to Alberta’s housing market than other provinces’ since there is generally no legal recourse for uninsured mortgages with low loan-to-value levels in Alberta, in contrast to much of the rest of Canada.  These non-recourse mortgages could create incentives for some homeowners facing an income shock to pursue a “strategic default”, and thus place further downward pressure on prices.”

Here’s a quick Calgary summary as of today:

  • 85 foreclosures/judicial sales listed
  • 2 sold between February 1-7, both for a bit above asking
  • Bowness, LP: $575,000,  SP: $582,100
  • Hidden Valley, LP: $269,900  SP: $272,000
Calgary luxury home sales - Feb 1-7 2016

Calgary luxury home sales, February, Y/Y comparison

Sales-to-new-listing ratio - Feb 1-7 2016

Sales-to-new-listing ratio:  February 1-7, 2016

Calgary Real Estate Stats Summary - February 7 2016

Calgary Real Estate Stats Summary, February 1-7, Y/Y comparison

One response to “February 1-7, 2016 Calgary Real Estate Market Update

  1. Thanks for the great reviews Mike. Very appreciated. Like the factual data you provide, even though it may not paint the prettiest picture for us all.

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