Category Archives: Mortgages

The Calgary housing market is all sweetness and light

Welcome back!

Sunshine, lollipops, and puppy dogs can also be added to the basket of good things which we have in Calgary. Unlike the craziness which has befallen the real estate market in Vancouver, we have stability in the world’s fifth most liveable city. If you believe the Toronto Board of Trade, Calgary is the best city on the planet. Let’s hope that Garth Turner’s recent visit here did not infect us with the Toronto disease of negativity and defeatism. It appears that no amount of loathing from the likes of jealous Ontarians will have any effect on our terrific city and its potential. Calgary remains an oasis of innovation and entrepreneurial spirit, with a balanced and healthy real estate market.

Just this morning I heard our dynamic and enlightened mayor, Naheed Nenshi, on the Eyeopener describing Calgary as the city of the future. I like our mayor, but I disagree. We are the city of the here and now, and the envy of the world. After seeing recent political developments, let’s get ready to welcome an influx of progressive, free-thinking people from Quebec to the city of opportunity.

RBC’s latest Housing Trends and Affordability Report said the local market has  enjoyed the best of all worlds recently: stronger home resales and home  building, moderately rising prices, and attractive and improving affordability. Calgary housing market among Canada’s most affordable

We’re not without some challenges, however, but our problems are small by comparison. Not enough inventory is the major concern. Students are having a hard time finding accommodation this semester. I guess it all depends which side of the fence you’re on. Landlords can pick and choose who they’ll rent to, and get a fair return on their investment. Tenants, on the other hand, will be paying more and will be getting screened more carefully.

Down to the nitty-gritty data, very little has changed since I last blogged two months ago. I fully expected we’d be seeing the usual autumn price drops by now, but the median price is still at spring-like levels. Inventory is still low, down 22% compared to last year. It’s difficult to have sales increases when there’s so little choice for buyers, but somehow, sales are still up over last year, and also up compared to the 3-year average.

First-time buyers

Two months ago, we were inundated with dire predictions of a market collapse when the end of 30-year amortizations was introduced. I expected first-time buyers would be hit hardest by the new rules, but the impact has been minimal. The table below is typical of the homes which first-time buyers will purchase, and is identical to last year, except for a slightly higher price:

Date # Sales Price per sq ft
2012 188 $250
2011 188 $239
Criteria: 2-storey homes in the suburbs under 1700 sq ft for the 30-day period Aug 8 – Sep 6, 2012

The biggest obstacle for first-timers is the lack of inventory. It’s hard to buy a house when there’s nothing to choose from. For the market to remain viable, we need buyers at the entry level so that move-up buyers can sell. This lack of listings really shows up in the “under $500,000” price range, where there is only a 66-day supply of homes for sale.

What happens when there’s a lack of inventory?

When there’s a lack of inventory, an attractive and accurately-priced home will sell quickly. The above house was listed in the morning and had a conditional sale by sundown.

I hope you’ve enjoyed the great weather this summer.  Between real estate transactions, I finally climbed Canada’s highest maintained hiking trail which is right on our back door in beautiful Kananaskis Country. Centennial Ridge – Mt Allan hike.

Check back often, as I’ll be updating the blog regularly, at least until ski season starts.


Sucking and blowing

Have you noticed something missing from the bubble blogs over the past few days? Conspicuous by its absence?

When sales are robust and prices are climbing, it’s a daily occurrence to hear that the real estate board’s stats are unreliable. An untrustworthy source of information. You know, cooking the books.

Now that sales and prices are declining( a normal occurrence in summer), we never hear mention of it. Suddenly, the real estate board’s numbers are infallible. Impeccable, trustworthy, and incapable of error.

Sucking and blowing, both at the same time.

It’s football season – again

Three times the mortgage rules have been tightened with little change in sales or prices in the Calgary market. Three times the blog dawgs were in a feeding frenzy for a few days. Three times they lined up to make the kick. Three times Lucy pulled the ball away.

For a fourth time, they’ve all lined up. What will be the result this time?

Go Stampeders!!(except when you play the ‘Riders 🙂 )

Examples of the trustworthy stats

A zealot from, ironically with the name Questioning Calgary Stats left an anecdotal comment today: “Some comments on this blog provide examples of people who bought in Calgary in 2008, 2009, etc. and can only sell for a loss today.”

Let’s look at the facts. Over the past three days, 25 homes have sold which were puchased originally in 2008 – 2009. A total of 16 sold for more than the purchase price, or 64%. Not surprisingly, it appears that only the losers go to

Bidding wars update

Over the past three days, 11% of homes sold for list price or higher. A tear-down in Rideau Park sold in one day for $30,100 over list. Selling price was $880,000.

Mortgage changes are too late

Two Moody’s analysts maintain that Canadians have borrowed too much and consumer debt will be the undoing of some:

‘Last week’s mortgage changes unveiled by regulators and the federal government are positive for Canada’s banks, but “may be too late to avoid a housing correction,” according to analysts at Moody’s Investors Service.’

Read more Mortgage changes may be too late

No more 30-year amortizations

Update June 21: I received an email from a mortgage broker which states the following: “If you have a client on the fence if they produce a contract within the next 2 weeks (to July 9th) they will be subject to the old rules until December 2012.”


The government will reduce the maximum amortization period for a government-insured mortgage, lowering it from 30 to 25 years, and also drop the upper limit that Canadians can borrow against their home equity from 85 per cent to 80 per cent. The government expects less than 5% of home buyers will be affected by the changes.

If you were paying attention, you’ll understand Continue reading