A soft landing is underway in the Canadian housing market and should continue but Calgary and Edmonton are bucking the trend with sales rising compared with a year ago, says a new report released Tuesday by BMO Capital Markets.
The report, by Sal Guatieri, senior economist for BMO, said the Canadian housing market is “calming not crashing.”
“In most regions, sales have fallen at double-digit rates this year from high levels last year,” said Guatieri. “But the rate of decline has slowed recently.
“By contrast, Alberta enjoys decent sales growth.”
As of April, the three month moving average of sales in the existing home market was down 10.9 per cent across the country. However, Calgary and Edmonton were the only two major markets to see growth at three per cent and 1.2 per cent, respectively.
Also, while the average sale price across Canada rose by only 1.0 per cent, Calgary led the nation with a 7.5 per cent hike. Edmonton was up 3.2 per cent.
Guatieri said Calgary’s resale prices are “supported by good valuations, following the 2008 correction, and strong job growth.”
“The upward trend should continue, as Alberta is expected to lead the nation’s economic performance in 2014,” he said.
According to the Calgary RealEstate Board, year-to-date until May 27, there have been 9,541 MLS sales in the city, up 3.89 per cent compared with the same period a year ago. The average sale price has risen by 6.6 per cent while the median price has increased by 5.51 per cent to $399,900.
At the national level. Guatieri said tighter mortgage ruls have slowed credit growth, helping to cool the housing market in an orderly fashion.
“Lack of pent-up demand, with homeownership rates near 70 per cent, and elevated household debt have abetted the slowing,” he said.
“Nationwide, sales are expected to stabilize this year amid steady job growth. Although long-term interest rates are likely to rise moderately next year, they should remain relatively low for some time.”