CALGARY HOUSING Single Family Detached, Town House and Condo Average Prices with Total Residential Listings and Sales and the TSX Energy Index
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NOTE: Condo data from July 2006 to November 2010 are CREB combined Strata. The TSX Energy Index is x15 to fit the chart.
In July 2017 total residential sales in Calgary broke the spell of an endless summer and rejoined the well established downtrend of lower highs that began mid year 2013; the sales party has stopped bringing prices down as well. In December 2016 real estate buyers heard Trumpets and moved the average price of a detached house to a historical peak but now seven months later, price exhaustion is setting in.
The detached house buying crowd placed bids while ignoring oil patch realities, emigration and earnings which are all well below their peaks.
Condo prices peaked in July 2016 and Townhouse prices zoomed to a new peak in May 2017 and both are giving up ground.
The detached house buying crowd placed bids while ignoring oil patch realities, emigration and earnings which are all well below their peaks.
Condo prices peaked in July 2016 and Townhouse prices zoomed to a new peak in May 2017 and both are giving up ground.
Oil patch worries turned into sweat by September 2014 when West Texas Crude prices broke down the 200 week moving average and began the slippery slide. My May 2, 2016 post "Energy Bar" notes that "...the energy high-yield default has soared to a record 13% rate, surpassing the 9.7% mark set in 1999, according to Fitch Ratings." The global glut of energy products is affecting not just local economies but international credit markets as well.
My August 25th post Big Oil Big Debt Big Solar with updated charts quoted the Wall Street Journal's note that "Some of the world’s largest energy companies are saddled with their highest debt levels..." Historic debt requires unimpeded income and the new U.S. President elect wants to "Declare American energy dominance a strategic economic and foreign policy goal of the United States." and "Unleash America’s $50 trillion in untapped shale, oil, and natural gas reserves, plus hundreds of years in clean coal reserves." (DonaldJTrump.com/policies/energy). This does not sound good for the Canadian energy sector unless it's Trump L'Oeil.
Gary Leach, president of the Explorers and Producers Association of Canada, agreed Canada must improve its competitive footing compared with the U.S. to attract investment. “From what we know about Trump’s agenda, we think the U.S. is now going to be a more formidable competitor to draw capital,” he said. Macleans.ca November 22, 2016
Foreign Direct Investment in Canada has been negative for two decades and the trend spiked to a new wide in both 2015 and 2016. Housing is a commodity as is heavy crude. Follow the money.
Here is another attempt to visualize the distortions of the market where the fundamental requirement of a yield to attract sustainable investment in real estate has been replaced with the lure of capital gains.
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The "improvement" that sits on the land is a wasting asset. If serviced land is so valuable, shouldn't the ratio be 1 house equals at least 3 townhouses? If the numbers don't make sense you can always rent. When MOI is low & MAR is high, developers and vendors have the edge.
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IN THE LAST 10 YEARS
AVERAGE SFD Prices are up: 126% in Vancouver 9% in Calgary 120% in Toronto WHILE Employment Earnings are up: 27% in BC 33% in AB 27% in ON |
