Rising interest rates and stricter mortgage regulations continue to take their toll on housing demand in Calgary, resulting in further sales declines in May.
A total of 1,726 homes sold in the city last month, 19 per cent below the same period in 2017, according to the latest data from the Calgary Real Estate Board (CREB), published on June 1. This sales total is 24 per cent below longer-term averages.
“The impact of rising lending rates and stricter qualification levels is causing demand to ease across all product types,” says CREB chief economist Ann-Marie Lurie, in a statement.
“Economic conditions have improved compared to several years ago, but the pace of economic recovery has not been enough to outweigh the changes in lending conditions,” she adds.
Demand continued to ease in May and inventory remained elevated, causing months of supply to soar nearly 67 per cent year-over-year to 4.9 months.
Here are 10 more facts that show how new mortgage rules combined with rate hikes contributed to Calgary’s declining housing demand in May.
1. Elevated supply was met by cooling demand last month, preventing any further price recovery in the market. The city-wide benchmark price of a home was $436,900 — a 0.6 per cent drop from a year ago but similar to levels recorded in April 2017.
2. Out of all property types, Calgary’s detached segment saw the largest decline in sales last month with a total of 1,058 units sold, down 23 per cent from 1,374 units in May 2017. CREB says the detached segment’s sales activity fell to levels not seen in over a decade.
3. In the detached segment, further gains in new listings allowed months of supply to soar 97 per cent to 4.26 months compared to 2.16 months a year ago.
4. The benchmark price of a detached home was $504,500, down 0.43 per cent from $506,700 in May 2017.
5. Sales remained unchanged in the condo segment from a year ago at 282 units.
6. In the condo segment, months of supply edged higher to 6.81 months, up roughly 8 per cent from the same period a year ago.
7. Benchmark condo prices declined further last month hitting $256,200, a drop of nearly four per cent from $266,600 in May 2017.
8. A total of 386 attached homes changed hands in the city, down roughly 16 per cent from 459 units a year ago.
9. With easing sales and more listings in the attached segment, months of supply pushed to 5.25 months, up 64 per cent from 3.19 months in May 2017.
10. Overall, attached benchmark prices remained relatively stable at $333,600, up 0.54 per cent from $331,800 in May 2017.