Alberta mortgage rates update
The latest from news from the Canadian Mortgage Housing Corporation (CMHC) indicates that the housing market outlook for 2008 is set to see lower demand for new and existing homes, while house prices will rise by an estimated 4%.
Alberta mortgage debt rising
The rapid escalation in house prices combined with recent records for housing starts and sales have resulted in a large increase in outstanding residential mortgage debt. From 2003 to 2005, mortgage debt in Alberta was increasing at an annualized rate of $3.2 billion. The most recent data indicates that the annual gain in outstanding mortgage debt has climbed by more than $11 billion, reaching a total of $59.4 billion. Looking forward, lower demand for new and existing homes in Alberta will cause price growth to moderate substantially. As a result, residential mortgage debt will stabilize.
House prices will increase
Despite a 24% increase in 2007, Alberta lost its status as Canadas resale price growth leader. Most of 2007s gain occurred in the first six months of the year when the market experienced listings shortages and a record pace of demand. The second half was met with reluctant buyers and a sharp rebound in supply, halting the pace of price growth. In such an environment, resale price growth will slow to only 4% in 2008, the weakest gain in 12 years. With a return to more balanced conditions in 2009, price growth will strengthen to 5.4%, reaching an average of $389,000.
Alberta key stats
Source: Stats Canada
Metric
Alberta
Canada
Population
2007
Consumer Price Index
Mar'08 (2002 = 100)
3,474,000
32,568,000
120
113
Average earnings
(Feb'08)
$45,105
$40,914
Unemployment rate
(Mar'08 )
3.4%
6.0%
Housing starts
(Mar'08)
55,100
243,000
Average
2007 (E)
$355,000
$306,397*
Residential Resale Price
24.4%
10.6%
(annual % change)
2008 (F)
$369,000
3.9%
$322,400*
5.2%
2009 (F)
$389,000
5.4%
$334,500*
3.8%
Chartered banks
$27,421,550,000
$152,478,903,000
Mortgages approved by lenders, residential 2006
Trust companies
$1,287,091,000
$6,664,898,000
Life and companies other
$5,378,952,000
$30,225,144,000
Total
2007 E = estimated by the CMHC
$34,087,593,000
$189,368,945,000
* Canada calculation excludes Yukon and Northwest Territories Data based on application received date Mortgage approval data are gross and may not fully capture lending activities of credit unions, caisses populaires, other smaller institutions and privately-insured loans in some areas Quebec data is understated due to low response rate to the surveys in that province. *Conventional Lending data only
Local Market Indicators
Census Metropolitan Area Total Housing Starts MLS sales MLS average price
2007
13,505
32,176
$414,066
Calgary
2008 (F)
11,000
30,500
$429,000
2009(F)
10,750
29,500
$450,000
Edmonton
2007
14,888
20,427
$338,636
2008 (F)
11,700
19,250
$355,000
2009(F)
11,850
19,000
$375,000
Sources: CMHC, Canadian Real Estate Association, Local Real Estate Boards, Statistics Canada MLS = Multiple Listings Service
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