Interest rates fuel Calgary housing market

Apr 1, 2010, Interest rates fuel Calgary housing market

CALGARY – Calgary’s housing market in March was fueled by an expected rise in interest rates with MLS single-family home sales up by 29 per cent compared with a year ago and condo sales soaring by 37 per cent, according to data released today by the Calgary Real Estate Board.

There were 1,396 single-family home sales last month for an average price of $471,269, up just over 12 per cent from March 2009.

The 609 condo sales averaged $296,660, an increase of just over four per cent from a year ago.

“The spring market has come early to Calgary,” said Diane Scott, CREB president. “Improved economic

conditions, better employment prospects, and an earlier than expected rise in mortgage rates are all contributing

to this early boost in sales this year.

“Undoubtedly the recent announcements by all our major banks to raise mortgage rates are motivating

buyers to take the plunge. But Calgary’s market remains in a healthy position and our sales are not outstripping supply. The rise in demand will also motivate sellers to consider listing this spring.”

She said there has been some speculation that mortgage rate hikes will adversely affect housing demand in the longterm, but it should be noted that a rise in rates was fully expected.

The towns outside Calgary saw 423 sales during the month, up nearly 63 per cent from last year, for an average price of $360,805. That was up by nearly 10 per cent from March 2009.

The country residential (acreages) market experienced a whopping more than 78 per cent increase in sales to 66 transactions for an average price of $970,295, up more than 28 per cent from last year.

“Our average price has edged upwards as more move-up buyers enter the market and overall demand

strengthens,” says Scott. “But this is not an unusual trend during a spring market. We expect this modest price growth to continue, but a rise in listings will likely curb this trend.”

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