Calgary prices for repeat home sales continue to be the envy of the nation as a new report released Wednesday indicated the city had the best annual growth rate in April, reaching a new high.
The Teranet-National Bank National Composite House Price Index said Calgary’s year-over-year hike was 10 per cent compared with 4.9 per cent across the country in 11 centres surveyed.
Calgary also had the best monthly jump of 1.5 per cent while nationally it was 0.5 per cent.
The index is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.
The report said Calgary’s monthly advance was the third in a row exceeding one per cent and took the city’s real estate market to a new high.
Ann-Marie Lurie, chief economist at the Calgary Real Estate Board, said the report is basically in line with the organization’s price growth data.
“It’s a reflection of all the positive conditions in Calgary that have been supporting the housing market,” said Lurie. “It’s all the net migration. That’s the main driver I would think at this point. How many people came into this city over the past two years. It’s fuelling so much of this demand and basically supply hasn’t kept pace and that’s why we’ve seen those big price increases.
“However, we are starting to see some of that turn. We’re starting to see some of those listings pick up and I think that’s going to continue as we move into spring. That will help ease some of the (price) growth. It doesn’t mean it’s going to reverse the growth because there still is enough demand and support for demand growth but hopefully it should start to cause that (price) growth to kind of slow.”
According to Canada Mortgage and Housing Corp., net migration to the Calgary census metropolitan area was 31,996 in 2012 and 45,168 in 2013.
Month-to-date between May 1-13, CREB data indicates 1,276 MLS sales in the city, up 21.64 per cent compared with the same period last year. New listings have risen by 14.92 per cent to 1,956 but active listings of 4,185 are down 11.58 per cent from a year ago.
The median price in the city is up by 7.92 per cent to $432,750 while the average sale price of $483,686 has grown by 5.39 per cent.
Diana Petramala, economist with TD Economics, said the Teranet report indicates that home price growth in Canada is picking up steam.
“Lack of homes for sale in many of Canada’s major markets appears to be a key reason for mounting price pressures. Indeed, the cities with the sharpest price growth – Vancouver, Calgary and Toronto – are currently in seller’s markets, meaning seller’s hold most of the bargaining power.”
Annual price growth in Vancouver was 9.0 per cent and it was 5.8 per cent in Toronto.
“Home prices have maintained more momentum through 2014 than we had originally anticipated,” Petramala added. “We continue to believe that home price growth will moderate in the second half of 2014. There are a record number of new homes currently under construction, and the completion of these units should help bring key markets back into balance. However, with the recent decline in mortgage interest rates, there is considerable risk that housing heats up during the spring months.”