Fear of rate hike sparks Calgary housing sales

Fear of rate hike sparks Calgary housing sales

Re/Max realtor Tamara Pilipchuk.

Re/Max realtor Tamara Pilipchuk.

Photograph by: Yuri Choufour, Calgary Herald

CALGARY -Talk of rising mortgage rates has motivated buyers to take the plunge in March into home ownership, with preliminary data showing MLS sales are up considerably from a year ago — and average prices are following the upswing.

“Nothing has really happened in the Calgary real estate market for the past two years and now there’s an increase in confidence in the buyer market,” said Tamara Pilipchuk, a realtor with Re/ Max House of Real Estate.

“What’s driving the Calgary real estate market right now is the aff ordability of the housing market. It doesn’t matter what community you’re in, first-time homebuyers and move-up buyers are really deciding that now is the time to take advantage of interest rates because it’s not going to last.”

On Monday, Royal Bank of Canada, Laurentian Bank and TD Canada Trust announced they were raising rates on certain fixed mortgages, including the benchmark five-year closed rate, which jumps 60 basis points to 5.85 per cent, effective today.

“It’s probably an early sign of what we’re going to see in the next few months and further down the road, when the Bank of Canada starts tightening,” said BMO Capital Markets economist Robert Kavcic. “It’s the beginning of an upward trend.”

As of Sunday, according to the website of Mike Fotiou, of First Place Realty, MLS sales in the single-family market in Calgary were 1,252 month-to-date, with an average price of $469,859. Sales are up by more than 15 per cent from March 2009 and the average price is up nearly $50,000, or 12 per cent from last year.

In the condominium market so far this month, MLS sales were 537 for an average price of $298,019. Sales have increased by more than 20 per cent from a year ago and the average price is up almost five per cent.

If the average prices hold in the remaining days of this month, they would represent the highest monthly average since June 2008.

“Even in February, we saw a definite increase in competing offers as people started to realize that now is the time to capitalize if they’re going to make such a move,” said Pilipchuk. “We’re having our spring market right now, definitely, as people are fearful that interest rates are going to rise.”

MLS sales and prices have also risen so far this month compared with February’s activity.

Last month, there were 1,035 single-family home sales for an average price of $458,254, while the condo market saw 536 sales at an average $282,880.

“It’s all consumer confidence. End of 2008, 2009, everyone thought the sky may fall and we may follow into the footsteps of the U.S. Alberta’s economy is a little bit different from that and people realize we’re not spiralling down into doom and gloom,” said Pilipchuk.

Richard Cho, senior market analyst in Calgary for Canada Housing and Mortgage Corp., said sales in the local residential market continue to outperform last year’s levels.

“Sales continue to be supported by improvements in economic and employment conditions, rising home values and historically low mortgage rates,” he said.

Also, the prospect of interest rates rising later this year has forced some potential buyers to make purchases earlier than planned, added Cho.

According to Fotiou’s preliminary data, the median sale price of a single-family home so far this month is $422,250, up from $411,000 in February and $375,000 a year ago. For condos, it’s $275,000, up from $265,900 last month and $260,000 a year ago.

As of Monday, the Calgary Real Estate Board, on its website, showed active listings of 4,047 for single-family homes and 2,173 for condos. The month-end inventory of listings in March 2009 was 4,369 for single-family homes and 2,052 for condos.

mtoneguzzi@theherald.canwest.com

– – –

Calgary Home Prices Head North

March 2009 February 2010 March 2010*

Single-family average price: $420,354 $458,254 $469,859

Condominium average price: $284,056 $282,880 $298,019

– Unofficial data for month-to-date to March 28

Source: Mike Fotiou, First Place Realty

Posted via web from Toronto Real Estate News | Blog

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About Tariq Sultan
Dear Readers, I am a dedicated Toronto, Ontario based real estate professional who has been successfully meeting and exceeding the needs of his clients for past several years. I am actively involved in the insurance, financing, and mortgage industry. Real estate is not only my career – it is my passion. I strive to continuously provide my clients with exceptional service to ensure they are fully satisfied when it comes to their real estate needs. For any real estate related inquires contact me today, I will be happy to assist you. Best wishes, Tariq Sultan

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