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Outlook for the 2013 Calgary Housing Market

As with any new year, 2013 brings with it a wide array of new opportunities. Although we

are almost a full month into the calendar year, the remaining 11 months are a blank slate full
of possibility and uncertainty. Many individuals count the New Year as a way to reinvigorate
themselves. For many residents of Calgary, that might include the prospect of buying a new
home. Indeed, each New Year is full of surprises and new ventures, and it might be time to give
home ownership a try. It certainly won’t be an easy process, but, at the end of the day, owning
your own home is something you can take pride in for years to come.

But, the onset of the New Year is naturally going to bring about a few housing market forecasts
that can help you determine whether or not you really want to buy a house. One of the major
issues facing Calgary, the nation, and the world in general is the global economic downturn that
has produced various risks for any long-term investors. Buying a house, of course, is a very
long-term investment, and there’s going to be some natural trepidation no matter where you’re
looking to relocate. Just a quick glance at the global unemployment levels, lack of growth, and
the recent bursting of the U.S. housing bubble is enough to make anyone wary of investing in
real estate.

Indeed, Canada is often beholden to certain policies enacted by our neighbors to the south.
Perhaps the most obvious requirement set by the U.S. Federal Reserve is the relatively low
interest rate policy in effect until 2015. This certainly helps spur the growth of the housing
market as more consumers are willing to buy when the rates are low. Even so, the specter of a
housing collapse not unlike the one experienced recently in the United States is enough to make
money potential first-time buyers second guess their decision.

In fact, the Canadian housing market for 2013 was said to be at risk as a result of numerous
factors. Several studies have indicated that the housing market is due for a “correction” that
might bring about similar conditions to those found in the United States in recent years. The
highest risk was found in the two top markets of Toronto and Vancouver, but the effects could
filter out to other locales as well. Regardless, the studies fell short of claiming that the housing
correction would result in any kind of crash. This is largely because the risk of Canada’s debt is
far less dire than that of the United States.

Outside of the two major markets in Canada, there are certainly locations that will be relatively
insulated from any problems on the housing market. Resource-rich provinces like Alberta
and Saskatchewan will be able to buoy themselves based on high economic growth. This will
naturally lend itself to higher instances of home ownership because the market is much more
stable there than in other locations. Alberta tends to lead the nation when it comes to GDP
growth, and that’s largely a result of their energy sector. They are Canada’s leading exporter of
crude oil, and they certainly help maintain an even standard of economic stability.

The City of Calgary itself has also seen growth in recent years. In 2011, it topped 5% GDP
growth in production sectors like agriculture, mining, and oil and gas extraction. Heading into
2012, the growth evened out a bit, but Calgary’s overall economic prospects were still bright.
Indeed, the projections for 2013 indicate that Calgary’s GDP will grow by 3.3% over the next
year. Employment figures are also looking toward an increase for the upcoming calendar year.
This is a large reason why Calgary residents saw an additional 19,000 migrants added to their

ranks in 2012. Job prospects are much higher in Calgary than they are in many other locales
around the nation.

Of course, all of these economic growth factors and the subsequent influx of migrants have led
to a natural increase in demand for housing. Much of this demand manifests itself in the form of
rental properties. The increased migrant population has overwhelmingly opted for rentals as a
way to ensure a quick and easy living situation. This demand has caused the apartment vacancy
rate to dip down from 3.3% to 1.3%. In 2013, the migration patterns and demand for rentals are
projected to keep the vacancy rates at or below 1.5%. Naturally, the rental rates are going to also
see an increase as the supply of rental spaces diminishes and the demand only gets larger.

Most experts suggest that the rising costs of rental properties will spur a new demand for
those looking to buy a home in Calgary. Indeed, the amount of housing starts has increased
substantially since 2009, but has largely shifted to the construction of multi-family residences.
That means, you’re likely going to see a lot more new condominiums than you are single-family
homes. Even so, trends show that the gap between the construction of multi-family complexes
and the construction of single-family homes is starting to close.

The act of buying and selling single-family homes has seen a great deal of fluctuation in recent
years. 2012 saw an increase in sales for single-family homes despite having fewer listings
overall. This, of course, brought about an uptick in price, making it an ideal time for sellers.
The average price for a single-family home in Calgary was just under $425,000. If projections
remain steady, the availability of houses and their prices will not see significant fluctuations for
2013. The average price for a single-family home in 2013 should only be around $437,000. This
ensures that sellers will still get adequate prices, and buyers will not have to endure any major
increases in price.

Demand for condominiums also saw an increase in 2012, which naturally increased the price
for buying one of these spaces. More people started looking toward condos as their key to
the world of home ownership after the supply of single-family homes started to dwindle in
the second half of 2012. For 2013, the supply of condominiums is only expected to increase
as both single-family homes and rental spaces provide limited options. Several new units are
set to be completed in 2013, which is a reality that makes condominiums seem more enticing.
With average prices ranging from $240,000 to $280,000, it’s easy to see why many people are
flocking to these multi-family units in Calgary.

At the end of the day, there are many different factors that contribute to the overall feasibility
of buying a home this year. Economic factors are certainly major components of ensuring a
successful housing market. But, it’s important to not let any one factor determine exactly what
your course of action is going to be. If you want to buy a single-family home in 2013, all the
trends suggest that you might be looking at a difficult process. Even so, there’s always a chance
that you might end up being one of the lucky buyers in 2013 who finds the right house at the
right price. You should never let trends dissuade you from trying to get what you want, and,
when it comes to real estate, a realtor can certainly help you make the right choice in any kind of
economic climate.

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