Despite indications of a housing cool down throughout the country, certain markets within Canada are continuing to see a boom in real estate activity.
Housing market sees declines during fall
Data from the Teranet-National Bank National Composite House Price Index shows that while home prices were up by an average of 3.4 percent across the nation on a year-over-year basis during October, prices had actually dropped from the previous month. October also marked the 11th consecutive month of deceleration in year-over-year price increases. The index dropped by 0.2 percent from September to October, marking only the third time in 13 years that October recorded a month-over-month home price decline.
In addition, a new report from the Macdonald-Laurier Institute shows that while economic growth is growing in Canada, the housing market is projected to be replaced by manufacturing and exports.
"The housing sector has turned down, after leading growth in the spring," said the institute. "However, this softening has been outweighed by a rebound in the manufacturing sector and the stock market, after declines over the summer."
After a monthly decline of 2.7 percent in the housing index during September, the index also decreased by 1.7 percent in October, marking the fourth consecutive month of declines.
Cities in Alberta buck national trend
The province of Alberta, led by Calgary and Edmonton, seems to have missed the memo that the housing market is cooling down.
PowerwaterhouseCoopers and the Urban Land Institute’s Emerging Trends in Real Estate for 2013 reports that Calgary and Edmonton have displaced Toronto and Vancouver as the leading cities for overall real estate prospects in the country. Calgary in particular was singled out as the best city for real estate investment and development prospects, as well as coming in second place for homebuilding prospects.
Residential home sales have also seen growth in the Calgary area, according to the Canadian Real Estate Association. While the resale housing market saw a decline of 0.8 percent nationally on a year-over-year basis during October, Calgary experienced an annual increase of 26.7 percent during the month.
Home prices have also increased in the region, rising above the national average of $361,516 by 5 percent, reaching $418,721.
These figures have increased growth for Alberta’s housing market as a whole, with the province reporting 4,815 sales during October, up from 17.5 percent during the same time last year. The average home price in Alberta was $363,295 in October, an increase of 3.5 percent from 2011.
Growth shows no signs of stopping
Thanks to high employment rates and an influx of migration to the region, market growth in Calgary is projected to continue well into the next year.
RE/MAX’s Housing Market Outlook for 2013 has projected sales in Calgary to finish 2012 at 25,500, an increase of 13.5 percent from 2011. Meanwhile, sales are forecast to increase by another 10 percent during 2013, reaching 28,100.
Home prices are also predicted to continue rising during the coming year, reaching $423,000.
Positive indicators across the country
Despite Alberta, and Calgary specifically being at the forefront of Canada’s housing market, RE/MAX also projected growth for the rest of the country, albeit at a slower pace.
“Looking forward, there are a number of factors on the horizon that will serve to bolster residential activity in 2013,” said Elton Ash, regional executive vice president for RE/MAX in Western Canada. “Canada’s economic performance is expected to show signs of improvement, particularly in the latter half of the year, which should bode well for housing markets across the country.”
In addition, mortgage rates remain historically low, offering plenty of incentive for savvy home buyers. With the Royal Bank of Canada reporting that home prices are becoming more affordable across the country, it’s an excellent time for prospective buyers to explore home loans.