Last year, the spring market was one of the busiest on record, with almost two thirds of the year’s new condo sales taking place in the first six months and many projects selling out in a matter of weeks. It was also a period of significant appreciation in real estate values, with prices rising by as much as 10 per cent a month. As we entered the spring market in 2007, the question on many peoples mind is would the market repeat the record performance of last year and were the price increases experienced last year going to re-occur.

The spring market started early this year, with most sales centres experiencing increased traffic and higher sales as early as mid-January. With affordability becoming a big concern in the market place, particularly amongst first time home buyers, many consumers started looking for a home early this year, seeking to avoid the significant price increases which occurred in 2006. Additionally, the spring period is also the time of year when many developers launch new projects or release additional inventory, with over 12 new projects becoming active since the beginning of the year. The release of additional inventory encouraged many consumers to come out and shop the market, comparing the new projects with the established developments to make an informed purchase decision. The result was increased sales activity at both the older, more established projects and very rapid sales at the newly launched developments.

Compared to last year, new condo sales have experienced some moderation in terms of units sold, with only the north part of the city experiencing an increase in the total number of unit sales for the first three months of the year. The decrease in sales within the first quarter was not unexpected, with two significant factors affecting sales— price and supply.

The rapid sales during 2006 eroded much of the available supply of new housing, with many projects having fewer units available in the current market than a year ago. Likewise, the growth in real estate values has impacted affordability and many consumers are choosing to purchase smaller units to offset the higher costs. Fewer units available in the market has meant that some consumers are waiting for select unit types to come available before purchasing, which has subsequently reduced the number of units sold in 2007 relative to 2006, when these units were more plentiful in the market. Sales should continue throughout 2007 as projects continue to release inventory and new projects become active during late spring and fall period, with the overall number of sales expected to be slightly lower than last year, but still higher than the previous four years.

The strong demand for the available units has meant that prices have continued their upward ascent, with average prices increasing in all sectors of the city. Currently, average unit price ranges for the available units are lower in the north and northeast sectors of the city, where they average $284,706 and $253,141, respectively. Prices are higher in the south and west areas of Calgary, at $388,410 and $453,216 on average, and highest in the centre area of Calgary, averaging over $550,000. These prices are influenced by the available unit types in each sector, with higher prices for townhouse and high-rise concrete buildings, which impacts the average price in the south, west, and centre area. While the spring has seen more restrained growth in prices and reduced sales volumes relative to 2006, the market remains healthy, with continued strong demand for multi-family housing throughout the city. With new projects and phases anticipated to be launched throughout the year, particularly some exciting new developments in the downtown core, there will be excellent opportunities to purchase outside of the traditional spring period. As the supply improves, consumers can expect to find more housing options in the market and are encouraged to continue their search throughout the year, as excellent real estate opportunities can come at any time, not just during the “peak” season. CL