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Scotiabank Forum Offers Outlook for Alberta's Real Estate Market

CALGARY, Alberta, May 04, 2011 — In a presentation earlier today moderated by Scotiabank's Senior Vice-President, Prairie Region, George Marlatte, Scotiabank Chief Economist Warren Jestin was joined by Ted Zaharko, Owner and Broker of Royal LePage Foothills, to share their views on the Alberta economy, as well as the outlook and trends for the Alberta real estate market.

During the forum, held in Calgary, Mr. Jestin provided a brief overview of the economic and financial market trends likely to influence the Alberta outlook. He noted that "continuing solid output growth in emerging nations is providing important support to the global economy through increased imports and persistently strong demand for commodities. For Alberta, a resurgent resource sector will drive exports, jobs and investment, keeping the province at the top of regional growth performances in 2011-12."

Mr. Jestin proceeded to provide an outlook for the Alberta residential real estate market and discussed the key economic, industry and demographic trends that will shape the balance of the year and into the next. Mr. Jestin observed, "Alberta's real estate market continues to recover, with housing demand underpinned by rising employment and incomes, low borrowing costs, and population inflows from other parts of the country. Overall, we anticipate a modest pickup in home sales this year, and relatively flat average prices. Still, this would leave sales roughly 30 per cent below the unsustainable record levels of 2006-07."

Mr. Jestin pointed to several factors shaping Alberta's real estate market this year:

  • Market conditions are gradually shifting from favouring buyers to one of greater balance, which should support home prices going forward;
  • High home prices, rising mortgage rates and tighter mortgage lending rules will pinch affordability, especially for first-time buyers; and
  • More affordable property segments, including condominiums and lower-priced single-detached homes will likely be more active than the high end of the market.

Ted Zaharko of Royal LePage commended the relative strength of the Canadian housing markets. He stated that "here in Canada, we have been fortunate to have a much stronger real estate market than in the United States. The Canadian housing situation can in no way be compared to the problems the United States is currently experiencing."

Mr. Zaharko also offered his expertise on the real estate market in Calgary. He said that "our markets are stable across the country and it would appear that recent activity in this market place has increased substantially. We should start seeing an increased variety of listings and increased sales activity like we have seen in other major Canadian cities to date."

He noted that a few factors have been curbing the current residential markets in the Calgary area:

  • The long winter and only lately a cool spring has been holding back enthusiastic buyers; and
  • List prices seem to be determined from current listings in each area, and therefore price adjustments are a key factor in sales activity.

Today's presentation will be made available until June 1, 2011 at: http://www.snwebcastcenter.com/custom_events/scotiabank-20110414-cal-en/site/.

News source: Canada Mortgage and Housing Corporation (CMHC)

 

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