Last year was an exciting and record-setting time in the Calgary real estate market. Demand was high, prices increased and many sellers found themselves sorting through multiple offers on their home. Calgary’s growth was big news across the country and many outside developers staked their claim in our city’s active market. According to the Calgary Real Estate Board, the average price for a home rose by nearly 6% last year.
If the last twelve months were any indication of the type of year we are in for, we have a lot to look forward to. Increasing prices and low interest rates have created a sense of urgency for buyers. Well-priced homes have been selling quickly, and the median sale price continues to rise. Many Calgarians, especially first-time buyers, have wondered just how high prices can climb. Obviously, there are many factors at play, but Calgary is still very affordable compared to the other major cities in Canada.
It’s hard to ignore the recent headlines about the decreasing price of fuel and the speculation about how it will affect Calgary’s housing market. Will we see a sharp decline in house prices? Will all the growth that we experienced over the last few years take a sharp downward turn? Every expert has his own opinion, and it’s hard to say at this point what effect it will have, if any, in the real estate market. It’s quite possible that consumers will feel a little more cautious before making large purchases resulting in a much more balanced market over the next few months. Most people would agree that a minor cooling period has its benefits in a city that is experiencing such tremendous growth.
A larger and more important factor to keep in mind is Canada’s mortgage lending rules. The recent rate drop, although seemingly insignificant, caught everyone off guard. The rate drop was intended to stimulate the Canadian economy, but Bank of Canada also has an obligation to protect Canadians from overextending themselves financially. There is already speculation of more changes in mortgage rules to protect consumers. If you are planning to buy a home in 2015, it’s a great idea to sit down with your mortgage professional and request for a pre-approval. Although a pre-approval doesn’t guarantee financing in most cases, it gives you a head start on the financing process in the event of a change in the lending guidelines.
Whether you are planning on making a move in Calgary, or looking for your perfect small-town home in Okotoks, 2015 is shaping up to be another great year to make a move.