Strong sales growth in July
Tight market conditions support upward price trend
Calgary, Aug. 1, 2013 – City of Calgary residential sales totaled 2,268 units in July, a 17 per cent increase over the previous year and up more than six per cent so far this year.
The flood that devastated the Calgary area on June 20 likely contributed to pulling forward sales activity. Some of this activity is related to the displaced renters and owners seeking other accommodation. But those consumers already searching for a home may have sped up their purchase decision, in response to concerns regarding the impact tight supply levels would have on prices.
The Calgary resale market is firmly in sellers' territory, supporting price growth. While citywide prices are nearly seven per cent higher than levels recorded in July 2012, the unadjusted monthly gains have been easing. The benchmark price for the city of Calgary totalled $414,100 in July 2013.
Current market conditions have encouraged listing growth this month, for single-family homeowners. A total of 1,575 single-family homes sold in July, a 14 per cent increase over the previous year. Year-to-date, the growth is 2.5 per cent. While year-over-year new listings increased in July to 1,958 units, it was not enough to ease supply pressures in the market. Overall, active listings declined to 2,917 units, nearly 20 per cent lower than already declining levels recorded in 2012.
A total of 693 condominium apartments and townhouses sold in the month, a combined increase of 26 per cent over the previous year, and a year-to-date growth of 16 per cent.
Stronger sales growth in the condominium market relative to the single-family market is in part related to availability in the affordable price ranges. Year-to-date, there have been more new listings priced under $400,000 in the condominium sector than in the single-family market.
Consumers looking for affordable homes are considering community, product and price. While there are affordable single-family homes in some communities, some may prefer condominiums in the same price range so they can live in a preferred community or get a home that requires less renovation.
The growing demand for condominiums has also led to a tightening of supply. July active listings in the apartment and townhouse segment declined to 768 and 407 units respectively.
Tight market conditions supported price growth for all categories in July. However, unadjusted monthly gains were strongest in the apartment sector. Apartment prices totaled $267,600 in July, a 1.4 per cent increase over the previous month and nearly eight per cent higher than the previous year. The benchmark price for single-family and townhouses were a respective $461,600 and $294,500 for the month.
July sales growth has been stronger than year-to-date trends and longterm averages. However, if the level of new listings continues to rise, this could help ease tight market conditions.