For almost five years, the real estate market in Calgary has been described as slow, flat, worthless.
Compared to long-term averages, fewer homes are bought and sold these days. And those who do not sell, often go well below the required price.
According to one common measure, the prices for single-family homes are now about seven percent lower than they returned in October 2014. When you factor in inflation, the losses are even greater – at least on paper – for those who bought at peak, in real dollar terms.
This is often framed in the media, real estate agents, and in everyday conversation like bad news. And indeed, if you are like most Calgary and have your own home. (This city has one of the highest rates of ownership in the country.) It is especially bad if you want to sell.
But the other side of the equation is that homeownership – including the idealized detached home with a yard and garage – is available to many more people than in other major cities.
"If you are a first-time buyer and want your first home to be a detached house, based on our numbers, you will have a better chance of reaching it in the market like Calgary," said Penelope Graham with Zookasa, a Toronto-based real estate company.
This is according to a recent report by the firm, which, on the basis of data on Canada's income statistics and sales figures from various real estate boards, estimates that more than 50 percent of California's income earners can afford a typical, detached home after current prices.
Compare this with Toronto, where only the first 10 percent of earning workers are in the same boat. Or Vancouver, where only 2.5 percent.
So, especially for the first time a buyer in Calgary, recent real estate news might not look so bad.
"Looking at value"
Alim Haraniya worked as a mortgage broker for almost 20 years in Calgary, and while business may have been earlier in the past, he says he has a lot of interest from the original buyers these days.
Many "see value" on the market, he said, which he personally believes is now one of the best for affordability among major cities.
"Pricing wise, as opposed to the rest of Canada, for a great city to live? You probably can not beat it, to be honest," he said.
However, many potential buyers are in no hurry to withdraw the trigger.
"They are still afraid," said Haraniya. "There is still some uncertainty on the market, they do not know where Alberta will go, they do not know if this is the bottom, so that's the most important thing."
Looking at Zookkasa's report, he raised eyebrows to some of his assumptions when it comes to determining what is acceptable. The company assumed that people would make a payment of a surcharge of 20 percent and pay a mortgage rate of 3.75 percent during the 30-year depreciation.
Harani said that most of the fulfilling customers do not pay so much money, and the relatively new mortgage rules for a "stress test" will require them to prove they could pay a higher interest rate to qualify for a loan.
But all those assumptions are equal to the different markets they compare, he said the report outlines how much more affordable homeownership in Calgary compares to other major centers.
"The possibility of acceptability is definitely ranked quite high, surely," he said.
Buyer's market – if you can take a loan
Lori Grill, an associate with The Mortgage Group Inc., says it remains a "customer market" in Calgary.
And while reducing house prices over the past few years may be appealing to buyers who are the first time, in particular, she said home ownership is still unattainable for many Calgary.
This is largely due to tighter lending rules, but Grill said more and more customers are becoming aware of the new mortgage environment.
"They come to us saying," Oh, I do not know if I can qualify, "she said.
"And some of them are pleasantly surprised and leave my office quite happy … and then others go:" Well, well, I guess I have some work. I have to pay some credit cards. "I realize there will be an impact that does." "
The data in the report, Graham noted, are aggregated by real estate boards on every local market, and the typical home price is based on the "benchmark" in each region. This means that many houses will cost more than that – and much will cost less.
"We do not want to deliver the message that some of these markets are completely inaccessible to everyone," she said. "There will always be options that are below the average of these markets. So, it's important to keep in mind – that we are looking at aggregate data."
Calgary: The road ahead is a special focus of the PGC Calgary of our city, as it passes through crucial moments of crisis: the challenges we face, and the possible solutions while we explore what kind of Calgary we want to create. Do you have an idea? Email us at [email protected]
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