Jan 12, 2012, Calgary average house prices to increase: Royal LePage 3.6 hike forecast for 2012 Calgary average house prices to increase: Royal LePage 3.6% hike forecast for 2012

By Mario Toneguzzi, Calgary Herald January 12, 2012

CALGARY — A national report predicts average house prices in Calgary will increase by 3.6 per cent this year.

The Royal LePage House Price Survey and Market Survey Forecast, released Thursday, said a vibrant local economy and low interest rates will drive demand for homes in the city in 2012.

It expects Calgary to post some of the highest year-over-year price increases in Canada.

In the fourth quarter of 2011, detached bungalows in Calgary posted the largest year-over-year price increases, rising 6.2 per cent to $416,622. Prices for standard two-storey homes rose 2.2 per cent year-over-year to $414,778, while prices for standard condominiums were flat, rising slightly 0.1 per cent year-over-year to $248,567.

“The modest year-over-year gains we saw in the fourth quarter conceal a strengthening market in Calgary,” said Ted Zaharko, broker and owner of Royal LePage Foothills, in a statement. “A vibrant local economy combined with continued low interest rates has Calgary poised to be one of Canada’s strongest real estate markets.”

He said low interest rates combined with a lack of homes for sale helped create upward pricing pressure and led to frequent multiple offer situations as the year drew to a close.

Zaharko said first-time buyers looking to take advantage of low rates were an active group in the fourth quarter of 2011. Retirees looking to downsize were also an active group and drove demand for the city’s detached bungalows.

According to Royal LePage, by the end of 2012, average house prices in Calgary are expected to increase 3.6 per cent. Market activity is forecast to be the strongest in Canada with 2012 unit sales expected to rise 10.6 per cent higher than they were in 2011. At the national level, in the fourth quarter of 2011, standard two-storey homes rose 4.2 per cent year-over-year to $375,427, while detached bungalows increased 6.1 per cent to $344,392. Average prices for standard condominiums increased 3.6 per cent to $234,680.

Royal LePage expects average price growth to continue through 2012 and predicts national average prices to increase by 2.8 per cent by the end of the year.