Below is an excerpt from the Calgary Sun explaining the current real estate market. It describes that tenants have more choice than ever as the supply of properties is quite high due to unfavorable market conditions for selling. Read below to see why you should call Citysearch today!
“Calgary’s housing market is not yet in full recovery mode.
That’s the conclusion of Don Campbell, senior analyst and Jennifer Hunt, vice-president, of the Real Estate Investment Network (REIN).
The authors have developed the ‘real estate cycle clock’ that gauges how a market is performing. It is divided into three sections: The boom cycle; the slump cycle, and; the recovery cycle, with each divided into beginning, middle and end.
Using data from last year and through 2017, Campbell and Hunt identify where on the clock we’ll find the Calgary housing market.
“Since the summer of 2016, Calgary experienced slow, quiet and steady growth in employment,” they write. “Yet at the same time, the unemployment rate increased in many monthly statistics. This anomaly indicates a continued population growth as well as an additional younger cohort finishing school and entering the job market. The unemployment rate trend peaked in late 2016, and now indicates a downward trend. Currently the unemployment rate sits at 8.5 percent, while the employment rate is 68.6 percent.
These are the best figures since the crash in oil prices in late 2015.”
The authors report home prices, on average, are down slightly from the same time last year.
“However, when we look at the overall trend, we see prices took a strong move upwards in the first three quarters of 2017, indicating some confidence moving back in the housing market. This demonstrates the housing market appears to have hit a longer-term trough in real estate values. Most of these increases in prices are for detached homes, where apartments and condos seem to be doing worse compared to last year. This is no surprise, given the overbuild situation the city condo market finds itself in.”
On the MLS side, listings have risen; sales have decreased.
“These metrics align with the early and middle slump phases of REIN’s Real Estate Cycle Clock. With home construction of 5,525 from January to June 2017, this is not bad at all. In fact, compared to 2016 (January to June), housing starts went up 43.1 percent and, with relatively proportional sales numbers, this signifies higher market confidence by builders. Housing starts are also a good indicator of employment trends, which in turn support the growth of the city GDP.”
REIN says the official rental vacancy rate is at 6.9 percent.
“However, this number is lower than actual market conditions. Tenants have more choice now than ever before in Calgary and are using this downturn to upgrade their living conditions and move to upgraded or new units. This pushes vacancy rates downward while increasing vacancies in older, un-renovated units.
“The City of Calgary forecasts the (vacancy rate) will taper down in 2018, which is a good sign of growth in housing demand to come.”
To sum it up, Campbell and Hunt say “the economic fundamental key drivers and the market influencers indicate Calgary’s real estate market is in the middle of the slump.””