Calgary Real Estate Board says communities outside city setting records
New figures released by the Calgary Real Estate Board show third quarter home sales in outlying areas around Calgary reached historic heights, mostly due to lack of affordable options in the city.
Airdrie, Cochrane and Okotoks all recorded the highest third-quarter sales activity on record, led by single-family home sales.
Calgary Real Estate Board officials say while there is no evidence to suggest people are leaving Calgary for surrounding areas in significant numbers yet, affordability is becoming a major concern for home buyers in the region. And outlying communities traditionally have lower taxes than Calgary.
“People are moving to the area … a lot of people are buying in Calgary, but some people who either can’t afford the prices in Calgary or who are looking for different type of lifestyle, are choosing to look at the surrounding towns,” said Calgary Real Estate Board spokesman Doug Firby.
Firby says tight Calgary rental markets combined with a declining supply of affordable single-family homes in the city contributed to the growth in the third quarter. Additional demand after the June flood further boosted growth in more affordable communities.
“Rental units in Calgary are at a virtual zero per cent,” Firby said. “It really is a question of affordability.”
Earlier in the mayoral campaign Calgary Mayor Naheed Nenshi laughed off suggestions by some economists that high property tax increases and issues of affordability for Calgary real estate could force people to move to more suburban areas around the city. On Wednesday, Nenshi said he wasn’t concerned with the new numbers that show record sales in outlying areas.
“They’re starting from a very small base,” Nenshi said. “Calgary still has greater than 90 per cent of the population of the region …”
As of September, a typical single-family home in surrounding towns reached $351,400, a year-over-year increase of five per cent, according to the Calgary Real Estate Board. Meanwhile, Calgary single-family homes benchmark prices totaled $463,700 in September, a seven per cent increase over the previous year.
Numbers show weaker activity in High River following the floods did not outweigh the aggregate gains recorded in the surrounding towns. Sales in surrounding towns totaled to 1,288 units, 22 per cent higher than third-quarter sales in 2012.
But home sales figures in outlying areas is ultimately good for the entire region, said CREB’s chief economist.
“The entire region has benefited from the economic prosperity, as employment gains and stronger than expected net migration has supported housing demand,” said Ann-Marie Lurie. “However, price levels remain significantly lower than those in the city and are growing at a slower pace.”
Airdrie’s pricing for a single-family home reached $365,100, surpassing unadjusted highs recorded in 2007. Residential sales in Airdrie increased 14 per cent over the previous year, totaling 1,058 units. 80 per cent of sales activity was attributed to single-family home sales, of which more than 60 per cent were priced below $400,000.
Sales in Cochrane also increased seven per cent over 2012. However, Cochrane’s new home listings increased significantly, preventing erosion of inventory levels there compared to the other towns. New product sales accounted for 20 per cent of the transactions recorded in Cochrane, higher than Airdrie, Okotoks and Calgary. Pricing for a single family home in Cochrane averaged $405,933, a five per cent increase over the previous year.