New numbers from Calgary’s real estate board show a slow in demand for housing in the city and officials say the decrease in activity is in step with a decline in net migration levels.
In July, housing sales activity totaled 1,741 units, which is a 12.6 percent decrease from last year, and it was the 20th consecutive month that year-over-year sales have dropped.
So far this year, 6,908 detached homes have sold and activity is at the lowest level since 1996 and is 22 percent below the 10-year average.
CREB’s chief economist Ann-Marie Lurie says rising unemployment and fewer people moving into the city are contributing to the weaker market.
“It comes down to the economic conditions. So what we’ve seen is, first of all we started to see employment losses, I mean, we have to keep in mind that to date, in June, we’ve had 30,000 full-time job losses, this is obviously impacting housing demand. Next, we’re seeing, that’s contributing to that, is that lack of net migration so we actually saw the civic census come out, which showed people actually leaving the city, so all of that contributes to the weak demand environment that we’re currently seeing in the housing market,” said Lurie.
“To buyers and sellers that have been paying attention to the housing market in Calgary and surrounding areas, it should come as no surprise that we continue to see a slowdown in sales activity,” said CREB president Cliff Stevenson.
New listings were down in July, which helped to prevent prices from eroding further, and the residential benchmark price was $440,000, down 4.16 percent from this time last year.
Benchmark prices for detached homes across the city were 3.4 percent lower than last year but were similar to last month and totaled $502,300 for July.
Experts say prices on detached homes seem to be leveling off but an oversupply in the apartment sector means prices will continue to fall in that category.
Last month, the benchmark price for apartments totaled $277,000, which is a 0.4 percent decline over June and 6.6 percent below 2015 levels.
Semi attached and row attached residences recorded a year-over-year decrease of 3.1 and 5.5 percent for July prices of $385,200 and $310,300.
“Buyers are expecting further declines in sold prices, and sellers are adjusting to softer demand with price decreases. When these expectations intersect, we're seeing sales activity in the market, but not at the level realized over the last several years,” said Stevenson.
Darren Langille is the CEO of Redline Real Estate and says there are a few things sellers can do to set their property apart from the others for sale.
He says there are three reasons why a home doesn’t sell; insufficient market exposure, the condition of the home and the price.
“You have to come to the table with something that’s going to give more value than ever before, If you’re four bedrooms and you’re competing with three bedrooms and you used to price yourself a little higher than them, it made sense, or you’re square footage is a little higher or you’ve got a bit more upgrades, you used to add a premium to your home, now you have to give that into the initial purchase price to get the interest from the buyer marketplace,” he said.
Langille says he doesn’t think things are going to change any time soon and that the best part of the selling season is coming to an end for this year.
He says sellers need to be a little more aggressive with price at the beginning when the buyer’s interest is peaked to avoid making a large reduction if the property sits on the market for a while.
Average home price for July 2016 by region:
| Calgary | 484,998 |
| Airdrie | 395,877 |
| Rocky View | 593,221 |
| Foothills | 612,573 |
| Mountain View | 336,417 |
| Kneehill | 163,556 |
| Wheatland | 358,668 |
| Willow Creek | 249,833 |
| Vulcan | 164,250 |
| Bighorn | 615,176 |
To see the full CREB City of Calgary monthly stats package, click HERE.
To see the full CREB Calgary Region monthly stats package, click HERE.
