Home Buying Activity Moving at Brisk Pace in Alberta
Friday, May 9, 2014
We have heard a lot about the high prices of real-estate in Canada and in Alberta specifically, but this has clearly not put off buyers.
- Alberta's demand for housing is driven by the province's economic growth, a strong influx of migrants, a constant rise in wages and the low mortgage interest rates. The net migration to the province stands at almost 100,000 people per year, which means the province's population grows by 3.5 per cent annually. Its economy is also projected to grow by 3.6 per cent, which is a lot higher than the rest of the country.
- To accommodate all the new-comers and compensate for the homes that become too flawed to re-sell, the province is building fast. After building 18,431 single family detached units in 2013, the province will build about 19,100 in 2014. Multi-family start-ups will also increase from 2013's 17,580 to 18,000 in 2014.
- 66,080 homes were sold in the province in 2013, and that is projected to rise to 68,500 in 2014 and to 70,100 in 2015. 31,300 homes will be sold in 2014 in Calgary alone. These numbers are still below the 2007 peak, but not by much.
- The province's average house price was $380,969 in 2013. That is projected to rise to $391,100 in 2014, and to $401,000 in 2015. Calgary leads the province with an average house price of $449,000 in 2014.
- Edmonton's real-estate agents are also busy, with a March 2014 increase in sales of 9 per cent over March 2013 and its number of sales almost reaching the record levels of 2007.
- Albertans, and especially Calgarians, are not crazy to continue buying. In Calgary the average house costs 4 times the average family's monthly income. In Toronto the average price of a house a 7.2 times the average monthly income. In Vancouver the average house price is a whopping 12.4 times the average monthly income. Demographia, which tracks affordability globally, regards 5.1 as unaffordable.
So long as the elements that drive the demand remain in place, house buying in Alberta is likely to continue.