Category: canadian real estate market (3)

calgary-sunsetCalgary real estate resembled a more vibrant market in 2012 with a good kick start in the early months of spring and finished the year with strong, yet cautious momentum. This sales trend was most noticed in the Luxury home category which picked up dramatically in the spring and has recently coasted into a bit of a lull. The mid and lower end home market gained traction and has calmed in recent months but remains the bread winner. A drop in the number of available MLS listings in this low/mid category has kept the supply in check and prices relatively firm. Condo apartment prices crept up 3% year to date and the recent influx of new condo builds is maintaining a good supply of product and holding the prices competitive. Continue reading ..

calgary-skylineThe media has been ripe lately with stories of how the real estate market in Canada is over-valued and is now cooling. If you lived in Vancouver of Toronto, you would think that this is a pretty accurate indication of reality. However, if you reside in Alberta or Saskatchewan, you are probably wondering what kind of drug these reporters are on because their world is bustling with jobs and activity. So what is the real story in the local Calgary real estate market?

First, the real estate market is local. Like the weather, listening to a report that the Canadian real estate market is preforming poorly is like hearing that the weather in Canada is bad. Certainly Calgary is influenced by the national economy, just as we are by the global economy (now more than ever). However, real estate is a local story. Calgary is leading the nation in job growth and net in-migration, which leads to demand for residential real estate. While the rest of the nation (even the western world) is struggling to create jobs, we can’t seem to find enough people to fill the posts. So, when you hear that the real estate market is cooling down, its akin to having your head in the freezer and your feet in the fire. On average your temperature is may be moderate or dropping, but it doesn’t accurately reflect what’s happening locally.

Our research indicates that we will continue to have strong demand for residential real estate for the next two years. Price gains should be gradual and moderate, however lately we are concerned about a reduction in available listings, bringing our months of inventory to under 3 months for single family and townhouse listings. If inventory continues to decline, this could cause some pressure on prices to increase. Keep in mind that although prices have been rising, they have been stable for the past quarter.

This local/national example also applies to your local neighbourhood and what is happening in Calgary does not always reflect what is happening in your local community, or your particular street. If you zoom into this level the trends that we’ve witnessed generally are:

  • In increase in demand and firming of prices in the inner city
  • Increased demand for lifestyle properties and walkable communities
  • Increased demand in adjacent, bedroom communities like Airdrie
  • Cooling of demand and softening of prices in the outlying suburbs.
  • Slowing demand for acreage properties
  • A trend to smaller, more practical and energy efficient homes

As well there are the usual seasonal trends, and of course you could discover trends for pockets within your community. An experienced real estate expert can assess all of these variables that affect the value of your property and more. If you would like to stay current on the values in your local neighborhood, we will send you updates of the sales and listing activity monthly in a convenient email report. If you would like a current market evaluation of your property, simply call us and we will be pleased to provide this for you, so can make the best most informed decision on your real estate investment.

 

mortgage-clamp-down-Sano-Stante-Real-EstateIn an effort to cool the consumers appetite for debt in this current low interest climate, the Fed’s have further tightened the screws on Bank lending. The Canadian Government’s “Financial Stability Board” has published new guidelines for underwriting mortgages. Following is a summary of the proposed changes which may take effect by September 2012:

  • Lines of credit should not exceed 65% of the homes value. While a customer can still borrow 80% LTV, at least 15% will need to be in an amortizing segment. Existing clients may be grandfathered but there will be some cases as it relates to structural changes in an existing loan plan where the new rule may apply.
  • For debt service coverage (TDS) at a minimum. the qualifying rate for all variable interest mortgages regardless of the term and fixed rate mortgages with a term of less than 5 years should be the greater of the contracted mortgage rate of the five year benchmark rate (Bank of Canada).
  • GDS Calculations will require supporting documents (tax, utility bills, etc) or clear and consistent benchmarks that adequately assess these additional costs.
  • Banks will be required to clearly define “non-conforming loans”. This may include some forms of equity, low documentation etc. In these cases LTV should not exceed 65%.

If you are contemplating taking a HLOC at 80% LTV now is the time to get your application processed before the new guidelines take effect. You may not need to use all the money, but better to have access to it and not use it, than to be clamped down to 65% LTV.

For more information on this, or other Calgary real estate facts call us anytime 403-289-3435