Housing prices in the city declined in 2019, but the second half of the year saw growing strength in the city’s real estate market.
That’s the recent finding of the Royal LePage House Price Survey, released this month, finding prices in the fourth quarter fell by 2.3 per cent for the same period last year. But the $469,916 aggregate price at the end of the year was up from June by 2.1 per cent.
Add in rising sales and falling inventory, as noted by recent Calgary Real Estate Board data, and the market could be set for a recovery, says Corinne Lyall, broker and owner of Royal LePage Benchmark in the city.
“What people are starting to recognize is it could be the bottom of the down market, and that they may want to take advantage sooner than later.”
She further notes a number of favourable conditions have been in play in recent months to boost demand and support prices: stronger sales, lower mortgage rates and the fact buyers are getting used to the federal government’s mortgage stress test rules.
The survey also revealed certain housing segments fared better price-wise in the fourth quarter of last year, including two-storey homes. Its median price ($514,139) only declined by one per cent while the bungalow price ($488,521) declined by 4.1 per cent compared with the same period the year before.
Condominiums struggled the most, however, dropping almost seven per cent ($265,488).
Despite the declines, Royal LePage forecasts price growth in the city for this year. Released last month, the Royal LePage Market Survey Forecast predicts the aggregate home price will rise 1.5 per cent year over year to $477,000.
A key driver behind the modestly positive forecast are improvements in economic conditions. Unemployment remains problematic at more than seven per cent, but migration remains positive. The recent CREB forecast for 2020 notes annual migration to the city, ending April 2019, showed an increase of more than 9,500 people. That is down from 2018 when net migrations exceeded 11,500. But it’s an improvement of 2016 and 2017 when migration was negative.
Lyall notes positive migration can take awhile to translate into momentum in the city’s real estate market. But it’s already affecting the rental market, pointing to the city’s 3.9 vacancy rate, she adds.
“We’re anticipating more buyers coming into the fray, matched with falling inventory,” she says, pointing to recent CREB numbers showing inventory and new listings fell in 2019 from the previous year. “And when that happens prices often stabilize, and go up.”
She further says the market is split between the sluggish over $500,000 price segment and the under $500,000 market, which is more of a seller’s market. CREB data shows sales for the lower-cost single-detached homes, for example, rose by almost nine per cent, while sales for homes priced more than $500,000 dropped by 11 per cent in December, year over year.
As such, Lyall notes low-priced homes currently drive the market across the city, regardless of neighbourhood.
“The competition for homes is anything under the $500,000 mark because that’s where the majority of buyers are.”