The Calgary real estate market is poised for two years of steady appreciation and rising sales, even as many cities across the country prepare for a looming price correction that threatens to push home values down by 10% - or even more.
TD Economics has forecasted that average house prices will fall 10.2% over 2012 and 2013. That would mean a house currently priced at $370,000 would drop nearly $38,000 in value once the correction has run its course.
But Calgary property owners won't have to worry about this downward trend largely because they've already gone through theirs. Instead, they can expect the city's average residential resale price to rise to $405,800 in 2012, up from $403,700 in 2011, and to rise to $410,500 in 2013, according to TD Economics.
That's a 1.7% increase in the average home value at the same time house prices in Vancouver are expected to drop 14.8% from their peak.
Meantime, sales activity will also gradually strengthen in Calgary, according to TD Economics, reaching 22,500 sales by the end of 2013 from just 21,000 in 2010. Economics
Calgary stands to gain despite the impending housing downturn because of its sound economic fundamentals. TD Economics expects crude oil to remain between $95 and $100 a barrel, a price at which energy companies can continue to make large profits and hire plenty more workers. As of April 2011, Calgary's unemployment rate fell to 6.1%. That's 1.3% lower than the national average of 7.4%.
The improving economic outlook for the province has led TD Economics to predict that Alberta's real gross domestic product (adjusted for inflation) will reach 4.2% in 2011, up from 3% in 2010.
Given the province's strengthening natural resource sector and low unemployment, the Canada Mortgage and Housing Corporation (CMHC) expects net migration to consistently rise, with 12,300 out-of-province workers settling in Alberta in 2011 and 14,000 in 2012. This is good news for the rental market, which lost a slew of renters in 2010 when net migration in the province fell to 11,000 from 22,136 in 2009.
As more people move to Calgary, CMHC expects the city's vacancy rate to steadily decrease, edging down to 3.4% in 2011 and to 2.9% in 2012. That means landlords will be able to raise rents. The average rental rate for a two-bedroom apartment is expected to rise to $1,090 in 2011, up from $1,069 in 2010, and to $1,120 in 2012. Condos on the mend
The city's condo market has just regained some ground after tumbling from its peak in 2007, when the average price for a condominium was roughly $330,000. The average price rebounded to $296,500 as of June 2011, a slight improvement from the average of $294,180 during the same time last year.To get the rest of the scoop on the Calgary condo market, pick up a copy of our October issue, on newsstands.
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