Low availability of housing in Calgary, paired with high demand for ownership, continue to push new and previously owned housing prices upwards, and create a high pressure market. While there is a solid trend towards small property ownership, with nearly 20% of current 2014 purchased being condominiums or townhouses, the housing market demand for single-family detached and intentional community residences is very strong.
As well, Calgary’s surrounding metropolitan area is experiencing a large amount of growth and lower housing prices, with satellite cities such as Cochrane and Airdrie attracting the owner that is comfortable with commuting to the city for work and entertainment. Yet, within the city limits, the demand is such that some properties experience ten or more bids on their prices within the first 48 hours of listing, with sale and completion of transaction taking on average 20 days.
Calgary housing sale prices have risen steadily for well over a decade. For the period of 2000 through to 2010, the average house price rose 126% ($173k to $399k), and shows no sign of slowing down. The average house sale price in 2014 so far is $556k, an increase of 39% compared to 2010.
As well, as evidenced by a record-setting 2,485 real estate sales in March 2014, there is are signs of a sellers’ market arriving with summer 2014, with high list price and a high probability of sale driving the boom. It is expected that sales time will decrease dramatically as the warmer months arrive, bringing with them the traditional influx of new Calgarians arriving from all corners of Canada and beyond.
Another positive aspect of Calgary’s current market is that luxury residence sales are experiencing a surge, with properties valued at $1 million or above experiencing strong sales in both 2013 and 2014 compared to earlier years. In fact, May 2013 had a record 84 luxury property sales within the city limits, and the current trend is for approximately two luxury properties to sell every day in Calgary.
As much speculation is built into real estate, the investor and prospective owner must pay attention to the fact that while the housing market is currently strong, there are no guarantees that the market situation will remain steady. As of April 2014, the reality is that the upwards trend is strong, and shows no signs of slowing down.
The average house price is expected to crest $600k by 2017-2018. Balanced against that, however, is the willingness of the market to continue buying at the current high prices. Should market saturation occur, a sharp decline in sales could be the first sign that housing prices have reached a plateau, and could possibly even decline. Another factor is that small property ownership may become the de facto standard, instead of the exception, as condominium development is currently at record pace. As with all investment, this is part of the risk assumed with real estate in such a high pressure market such as Calgary. Yet, as evidenced by the record setting sales and prices in 2014 so far, many are willing to take that risk, investing in property with their eyes on the potential reward the market in Calgary proposes.