It was a year of record prices for the Calgary resale housing market and the fourth most active year on record, but 2014 ended on a bit of a sour note for the real estate sector as it began to feel the effects of slumping oil prices.
For the year, total MLS sales in Calgary were up 9.3 per cent, at 25,664. The average sale price of $483,079, was a record for the city and an increase of 5.8 per cent over 2013. The local market also saw new peaks for condo apartment and townhouse sales.
But as the year ended, the market was showing signs of shifting.
“Changes in the economic climate are expected to cool housing market conditions in 2015, and December activity may be the first indication,” said CREB’s chief economist Ann-Marie Lurie. “However, any pullback that may occur needs to be kept in perspective, as 2014 housing activity far exceeded our expectations.”
Robert Kavcic, senior economist with BMO Capital Markets, said December will likely foreshadow what is in store for the Calgary housing market in 2015.
“Obviously the oil price story is going to have a pretty big impact there,” he said. “If you look at our economic outlook for example, for 2015, we’re looking at 1.8 per cent (economic) growth (in Alberta) and that’s actually going to be below the national average (2.2 per cent) for the first time since the recession.
“For the housing market, what that probably means is that the big inward flow of migrants that we’ve seen in the last couple of years like 30,000 or 40,000 per year is probably going to get cut in about half. So you’re not going to have that much migration supporting demand in Calgary.”
Todd Hirsch, chief economist with ATB Financial, also said the December sales slump is a sign of things to come in 2015.
“Starting in December, and going forward, we’re going to start to see the effects of the lower oil prices. We haven’t really seen too much of it yet. Usually these data are lagged a bit. But in November and December we started to see some of it,” said Hirsch. “We saw it in December housing sales.
“I’m still not expecting any kind of crash but I think we are in for several months of soft numbers and probably year-over-year dips.”
December marked the first month in close to two years that MLS sales were down compared with previous-year numbers — breaking a string of 20 consecutive year-over-year gains. However, average sale prices rose for the 35th consecutive month. Total sales in December of 1,083 were down by 7.5 per cent from a year ago while the average price of $475,036 was up by 4.5 per cent.
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In 2014, overall records were also set for the benchmark price of $411,417 and the median price of $427,000.
Annual single-family home sales of 17,185, the fourth highest ever, were up by 5.5 per cent from 2013. Record prices were established in all categories. The prices and their annual increases were: benchmark, $458,017, 7.8 per cent; median, $484,000, 7.6 per cent; and average, $553,147, 6.9 per cent.
Condo apartment sales reached a new record of 4,742, up 18.4 per cent from the previous year. The prices and their annual increases were: benchmark, $266,350, 8.7 per cent; median, $285,000, 9.2 per cent; and average, $324,122, 8.2 per cent. Average and median prices established new records.
Condo townhouse sales also set a new peak with 3,737 transactions, up 17.7 per cent from the previous year. Record prices were established in the average price and the median price.
The prices and their annual increases were: benchmark, $294,692, 6.3 per cent; median, $330,000, 7.8 per cent; and average, $362,571, 6.1 per cent.
“2014 was interesting from a couple of points of view. One of them, the key one we ended up talking about most of the year, was how condominiums have taken an ever-growing market share of residential sales and actual residential supply of homes under the $400,000 mark,” said Bill Kirk, CREB’s president.
Kirk said there was a “dearth” of single-family homes under $400,000 available in the Calgary market, which also helped the growth in condo sales in 2014.
In the towns surrounding Calgary, the stats for each category and percentage annual change were: sales, 5,513, 24.2 per cent; benchmark price, $342,325, 6.2 per cent; median price, $385,000, 8.2 per cent; and average price, $396,812, 7.4 per cent.
The real estate board’s full 2015 forecast will be released January 14 at its annual Forecast Conference and Tradeshow.
mtoneguzzi@calgaryherald.com
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