Canada’s housing boom is in its 13th year and Calgary is no different. In fact, in November 2011, MLS residential sales grew three times more than the national average and increased by 16% compared to November 2010.
So what does 2012 hold for Calgary? Not only will Calgarians enjoy the Centennial celebration of the Calgary Stampede, but I expect many changes in the real estate market.
Here are my predictions:
- Growth cycle: The condo market is at the start of a growth cycle. We’ve seen a 3 % increase in condominium sales between January and October 2011 in Calgary, compared to the same period last year according to CREB – and I expect this growth to continue in 2012.
- Diversifying real estate: Calgarians are diversifying their real estate portfolio. Rather than having one family home, Calgarians are buying a condo in town as well as a vacation home in the American Sunbelt.
- My theory is backed by CREB’s figures, as while condo sales have increased, only 988 single family homes were sold in Calgary in October 2011, which is well below historic levels.
- Meanwhile, the number of Canadians purchasing homes in America is rising. In March 2011, Canadians made up the largest percentage of foreigners buying homes in the U.S. – at 23 % – according to the National Association of Realtors. Canadians are attracted by the weak U.S. dollar, historically low interest rates, and rock bottom property prices.
- Educated Buyers: In my experience, buyers now ask more complex questions about the project and the builder, more time is spent fact-finding, and less ‘urgent’ buying decisions are made.
- Established areas: Rather than living in ‘cookie cutter’ communities, people are seeking established areas with genuine character. In 2011, 61 % of Calgary’s established communities saw increased sales according to CREB: Garrison Woods, Collingwood and Mahogany saw the largest sales, with 179 % combined. I expect this to continue next year.
- Jobs: Jobs are driving the demand for housing in Calgary. Total employment has risen by 24,000 year-on-year (2010 to 2011), while unemployment decreased by 6,000 according to the Labour Market Review of Calgary. The Market Review also shows that these new jobs are primarily in accommodation/ food services (12,000), trade (11,200) and healthcare/ social assistance (7,000). As most of these roles are based in the Downtown core, I anticipate that the best performing real estate will be those that ‘fit’ with the Downtown worker.
- Immigration: Increase in immigration and low interest rates will fuel housing demand. According to Alberta Finance and Enterprise, Calgary has experienced high population growth with an increase of 200,000 people in the last several years; of this, 11,698 are international permanent residents, a figure which has doubled since 2009.
- Government: Government agencies will have a strong impact on the sector in 2012, with Currie Barracks developed by the Canada Lands Company and the Bridges owned by the City of Calgary coming to market next year. The Westward LRT expansion will also impact property prices in affected areas.
Undoubtedly 2012 will be an exciting year for the Calgary real estate market. I’ve given my predictions on what will happen; what are your thoughts?