CALGARY – Calgary will experience a “very active” spring housing market as an improved economic outlook combined with record low interest rates and affordable housing are “fuelling recovery” in residential real estate sales, says a report released today by Re/Max.
“The supply of detached homes is beginning to tighten, with multiple offers becoming more prevalent in hot pockets throughout the city, particularly well-priced, entry-level product,” said the Re/Max Market Trends Report 2010.
“First-time buyers continue to drive the market, looking to take advantage of greater affordability before the window of opportunity closes.”
The report said that while the average price is still off peak 2007 levels it continues its ascent rising seven per cent in the single-family category to $441,217 and four per cent in the condo category to $282,639 over January 2009 levels.
“There has been a notable push by purchasers to get in before predicted interest rate hikes and tighter lending criteria,” said the report. “To that end, buyers are being more cautious in their pursuits, deliberately choosing not to max out debt service ratios, with a trend towards more modest pursuits that can be afforded. The market is picking up at all levels, with move-up buyers increasingly active.”
The Re/Max report, which looked at 16 markets across the country, noticed a sharp decline in active listings. A lack of inventory will be the greatest challenge facing housing markets across Canada this spring, it said.
That, combined with the threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario the introduction of the new Harmonized Sales Tax, have clearly served to kick-start real estate activity “prompting an unprecedented influx of purchasers.”
“Affordability is the catalyst for the vast majority of purchasers in today’s housing market,” said Elton Ash, regional executive vice president for Re/Max of Western Canada. “While homeownership is still within reach in many major centres, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now.”
Ash said the real estate market has experienced a 180-degree turnaround from this time last year.
“It’s clear that real estate from coast to coast has roared back to life and markets are once again firing on all cylinders,” said Ash. “The vast majority of markets are now recovered.”