Dichotomous Marketplaces – Calgary Trends in Construction for SFH diverge from Resale Market January 8, 2009Posted by DustinRJay in Calgary real estate, supply and demand, Uncategorized.
The new home construction market has shifted in comparison to the resale market. The new house price index for Calgary continued to rise into 2008 as compared to the resale market which peaked in 2007. The new house price index for Calgary has only recently had a year over year decline and as of October 2008 had declined by 1.6%. Against this price backdrop, single family home starts dropped 44% against a 29% drop in sales. Also, there was a large shift towards higher end houses in Calgary and the top end of the market experienced large sales growth. SFH units under construction have retreated to 2001 levels.
It is possible that participants from both marketplaces may find opportunity in new places for 2009. Builder’s may find less demand for high-end houses due to the slump in stock prices greatly affecting the wealthier class. The resale market may experience less new listings due to less people buying new at the top of the real estate pyramid. People looking to buy at below $350,000 may find that the best source of supply is in the resale market.
Below is a table of changes in the new SFH market that occurred over the last year:
CMHC housing information available here.