Despite being on Desjardin’s “Markets to Watch” list in terms of affordability of our housing market, Calgary resale market continues it’s march upwards. Affordability has decreased over the historic norms but housing prices are still supported by income growth in the city.
Net migration and population growth, coupled with Calgary’s vast employment opportunities together with comparatively high wages, remain the driving factors behind the price growth Calgarians continue to see. Improvements in inventory levels, easing some of the tightness in the market, has added to listing growth and furthered stability.
As we have for some time now, we have seen a tightening of the market at lower price points with a strengthening condo market and resale volumes in the surrounding areas.
Sales reached their second highest level for the month – down less than 3% from the historic high of 2,204 set in 2005 – and all segments showed growth in price and inventory as well over October of 2013. As we approach the end of fall, we continue to see a firm confidence in both homebuyers and investors adding to the anticipation that sales will remain at a positive level moving into the winter months.
Median and average price were up across all market segments over last year with the largest gains being felt in the single-family home and surrounding towns markets.
Fixed mortgage rates have remained stable and at their near all-time lows. Behind the scenes, bond yields, which fixed rates are based on, have been at both their highest and lowest points in over a year, and have ended up at where they have been for most of the last 12 months. Bond yields increased because of incremental improvements in the U.S. economy, and then decreased because of fears of the global economy. For the time being, these two opposing forces are keeping rate movements in check.
Variable mortgage rates remain unchanged, with the Bank of Canada (BoC), as expected, holding its overnight rate. Their latest announcement now forecasts that our economy will return to full capacity in the second half of 2016. This is important to note as once the economy returns to full capacity, the BoC will likely start to increase its overnight rate.
Fixed rates remain at near all-time lows. With rates this low, borrowers should beware of rate ‘promotions’ and ‘discounts’ and the restrictions they come with. A 0.05% difference in rate (2.99 vs 2.94) is $6/month on a $250,000 mortgage, but the restrictions could cost $1000’s extra if the property is sold during the 5 year term.
Variable mortgage rates continue to be a great option for well qualified borrowers. The Bank of Canada again held their overnight rate, and no increase seems likely for the foreseeable future.
With the up and down of the bond market we’ve had some awesome rate specials so if you’re in the market for a new home, get a rate hold through us – we’ll watch the market and make sure that we get you holds on all the great rates that apply!
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