Growth in new listings outpaced sales preventing inventory declines
City of Calgary, September 1, 2017 – Sales posted a modest gain in August, but a rise in new listings kept inventory levels elevated.
The second month of higher inventories compared to sales weighed on prices for the month. The unadjusted city wide benchmark price totaled $442,300 in August. This is 0.3 percent below last month, but remains nearly one per cent above last year’s levels. Overall total residential prices remain four per cent below peak levels.
“Employment growth is contributing to the stability in sales activity, but it is not enough to meet the recent rise in listings and make a substantial dent in inventory levels,” said CREB® chief economist Ann-Marie Lurie. “Unemployment rates remain elevated and job growth is mostly occurring outside the energy sector, slowing the recovery process. Broader economic improvements will be required prior to it translating into substantial improvements in the housing market.”
While most market segments showed a decrease the absorption rate the other bigger news is that the Bank of Canada announced that it has increased the prime rate by one-quarter point to 1.0 per cent, its second 25-basis-point increase since July.
The move, which will likely be a surprise for some, came less than a week after the latest Statistics Canada numbers showed the economy expanded by 4.5 per cent in the second quarter.
That followed unexpectedly healthy growth in the first three months of 2017 and easily exceeded the Bank of Canada’s projections.
In a statement Wednesday, the bank said solid employment and wage growth led to strong consumer spending, while the key areas of business investment and exports also improved.
“Recent economic data have been stronger than expected, supporting the bank’s view that growth in Canada is becoming more broadly-based and self-sustaining,” the bank said.
Looking ahead, the bank insisted future rate decisions will not be “predetermined” and will be guided by upcoming economic data releases and financial market developments.
For those who are considering taking advantage of the still low interest rates to invest in real estate there are still several market segments with lower absorption rates to choose from. If you are interested in an investment strategy specific to your needs please contact us. We would love to help!
Susanita de Diego
Download: Calgary & Area Real Estate Statistics – August 2017
