Calgary deserves some good news – and the latest Genworth Canada report on resale housing is just what the doctor ordered.
The Tuesday Metropolitan Housing Outlook report predicts that Calgary will see the greatest increase in housing prices over the next three years, estimating the average resale housing price will reach $474,472 by 2015.
“Calgary’s solid economy is fuelling brisk housing demand,” states the report, produced by the Conference Board of Canada and commissioned by Genworth. “The resale market is firm and has found a sustainable pace following the end of the global recession.”
The research was done prior to the flooding that has devastated Calgary and communities throughout southern Alberta, which could impact future sales and prices.
“Annual price growth accelerated late last year, and prices rose even faster in the first quarter of 2013, although the market remains balanced. We expect the market to stay balanced through the rest of this year, with the pace of price increases cooling over the course of the year.”
The report forecast the average resale housing price in Calgary to climb by 4 per cent this year to $428,819 followed by a 5.6 per cent increase in 2014 to $452,799.
Overall, the Canadian housing market is showing signs of stabilizing.
“The Canadian housing market is transitioning to a balanced level of supply and demand,” says Brian Hurley, the chairman and CEO of Genworth Canada. “While lower demand has cooled the housing market, this latest research shows moderate growth over the next few years which points towards a more stable market for both buyers and sellers.”
The spring 2013 Metropolitan Housing Outlook shows employment gains since the end of the recession have helped move mortgage payments in arrears and bankruptcies into a downward trend – except in B.C. where payments in arrears have flattened after an upward trend between 2008 and 2010.
Two statistics of interest are mortgage approvals for new homes and those for resales. Overall, total mortgage approvals are falling – fuelled by the decline in the resale market. However, mortgage approvals for new homes have increased by 3.4 per cent.
The Genworth report says the Ontario market may be facing the first decline in housing starts in four years for 2013, but is expected to rise again the following year as the economy strengthens and unemployment declines.
Atlantic Canada has had excellent growth in housing starts, but with low population growth the strengthening economy will not be able to keep housing starts from declining as starts align with demographic needs.
Quebec should face a contraction in housing starts for this year and in 2014, as government cutbacks and nervous consumers put a lid on housing demand – despite good employment and income growth.