The City of Calgary’s housing market – new builds and resale – finished 2018 with an abundance of inventory, according to reports from Canada Mortgage and Housing Corp. (CMHC) and the Calgary Real Estate Board (CREB).
On the new build side, CMHC says the inventory of completed, non-sold homes in the Calgary census metropolitan area stood at 2,105 homes at the end of the year. Included in the total are 542 single-family homes, 360 semi-detached, 288 townhomes and 915 apartments.
In December, builders started 530 new homes, including 223 single-family, 70 semi-detached, 124 townhomes and 113 apartments. The total number of new starts in 2018 was 10,971, compared to 11,534 in 2017, made up by (2017 figures in brackets) 3,791 single-family (4,423), 1,216 semi-detached (1,318), 1,561 townhomes (1,567) and 4,403 apartments (4,226).
There are a lot of homes under construction – a total of 11,452 – more than 60 percent of which are apartments (7,155), plus single-family (2,135) townhomes (1,370) and semi-detached (792).
In the resale market, higher inventory, declining sales year over year and a slight drop in prices from November to December, were a direct result of the lack of any sign of economic recovery, says the year-end report from CREB.
“Persistent weakness in the job market and changes in the lending market impacted sales activity in the resale market this year,” said CREB chief economist Ann-Marie Lurie. “This contributed to elevated supply in the resale market, resulting in price declines.”
Prices in December were down one percent from November and slightly more than three percent year over year.
Sales in December reached 794 homes, a full 21 percent decline from December 2017 and bringing total sales in 2018 to 16,144 homes, a 14 percent drop from 2017 and close to a 20 percent drop below long-term averages.
At the end of last year, 4,904 homes were listed for sale, compared to 4,322 in December 2017, taking the months of supply to 6.18, well into a buyers’ market. The bulk of the gain in inventory was in the single-family and attached home segments.
“Throughout 2018, the months of supply remained elevated and averaged 5.2 months,” said Lurie. “This contributed to the annual average benchmark price decline of 1.5 percent. Price declines occurred across all product types and have caused citywide figures to remain over nine percent below the monthly highs recorded in 2014.”
It was a year of carefully reading the market before deciding to sell or buy, said Tom Westcott, CREB president.
“Both buyers and sellers faced adjustments in expectations this year. Sellers had to compete with more choice in the resale market, but also the new-home market,” said Westcott. “With less people looking for a home, it became a choice between delaying when to sell or adjusting the sale price.
“However, buyers looking for more affordable product did not find the same price adjustments that existed in some of the higher price ranges.”
CREB will offer more insights into the 2018 market and a look at this year at its 2019 Forecast Conference and Trade show on Jan. 20. For more information, go to crebforecast.com