"In Calgary, we are experiencing the calm after the boom," says Diane Scott, president of the Calgary Real Estate Board. "The housing market went from sizzle to fizzle to simmer - and now the market has entered a more balanced and stable condition." This year, many are predicting it will be Alberta's time to shine again. But don't expect the rapid equity appreciation in Calgary of 2006 and 2007.
"New homebuyers will be selling earlier and move-up activity will be constrained by this slower equity appreciation," says Scott. She says once sales to active listings establish a trend in the 30 per cent range, a steady increase in overall prices can be expected. The Calgary Real Estate Board's latest report showed that ratio was closer to 40 per cent in much of 2009.
In Calgary for 2010, Scott's board predicts an average price increase of just over six per cent to $470,000. For condominiums, the average price is expected to rise about four per cent to $296,000. Elton Ash, regional executive vice-president of Re/Max of Western Canada, says it's Edmonton, however, where the best prospects are in real estate. "If you're looking for a hot area in the Alberta market, it's Edmonton," he says.
Those who buy there now might be hoping to catch the market before its next upswing. In figures reported in February this year by the Realtors Association of Edmonton, the average residential price was $314,783, down 0.7 per cent from a year ago. Inventory, meanwhile, has begun to increase at the same time.
"We expect that the local market will continue to be robust and prices will trend upwards through the year," says Larry Westergard, president of the Edmonton association.
Throughout Alberta, the real estate market will remain tied to the global energy markets. "Calgary and Alberta remain tied to global energy markets, and ultimately the outlook for oil and gas will play a big role in employment and migration to Calgary and our housing market," says Scott. "The good news is that we have the energy to recover."
Ash says the re-starting of investment in Fort McMurray will boost employment and the prospects for oil look good in 2010. That should be good news for the Alberta real estate market as well.
Unlike a few parts of British Columbia, Ash says he sees the overall picture of Alberta strong. There isn't much weakness there in the real estate market, he says. Even the southeast agricultural corner could turn out to benefit soon from coal bed methane exploration. "Unemployment is higher than normal, but not overly so," Ash says of the province as a whole.
The sector of the real estate market in Calgary that has struggled has been the luxury homes. While affordable properties have been sought by value driven first-time homebuyers, the higher priced homes haven't seen so much activity yet.
"We expect move-up buyers to begin to enter the market, but at a slower pace than the first-time homebuyers," says Scott, noting slower equity growth has meant many sellers have been holding off for now. "Consequently, luxury properties or higher-priced segments will struggle a little more in this current market."
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Investment Hot Spots:
Saint-Nazaire, Abney, Woods Harbour, Bothwell, Monkland
That's because the boom and recession there happened earlier, in part due to influences in the global oil market. Now Alberta's affordability should be a key driver to the market going forward this year.