“People are being heavily compelled to lock in,” says Doug Porter, deputy chief economist with the Bank of Montreal, in talking about the negligible spread between short and long-term money. Will Dunning, an economist CAAMP, said his group was not surveying consumers the last time short-term rates climbed like this so he can’t be sure what the reaction will be this time around.

While Benjamin Tal, deputy chief economist with CIBC World Markets, doesn’t think variable rates premiums will rise above prime, the drop in the discount we’ve seen in the last few months could impact on the housing market.

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Canadians pay steeply for that mortgage insurance, with premiums that can amount to 2.75% on the purchase price of their home. But in the end you have to wonder whether that government backing reduces premiums and amounts to a subsidy for Canadians buying with high-ratio mortgages.

Calgary Housing Sales Trending Up

Stable Pricing Providing Opportunities for Buyers

Calgary, December 1, 2011 – According to figures released today by CREB® (Calgary Real Estate Board), Calgary residential sales in November increased eight per cent over last year, at 17,538 after the first 11 months of the year. 

While sales activity tends to taper off in the winter months, so far this year Calgary area sales remain significantly stronger than levels recorded last year. Single family home sales totaled 962 for the month, an increase of eight per cent from November 2010. Meanwhile, year-to-date sales totaled 12,464, a 10 per cent increase over last year. Over the long term, however, sales remained a tepid 17 per cent below the 10 year average. 

“Despite any global economic cautions, consumers are actively seeking well priced listings in the market, a reflection of their positive long term outlook for the city,” says Sano Stante, president of CREB®. “Following two years of employment losses, the current growth in jobs is translating into improvements in the housing sector and a more optimistic consumer.”

November listings have edged down over last year’s levels, decreasing by two per cent. Lower listings combined with the increase in sales helped reduce the months of inventory to less than four months. 

The year-to-date average and median price of single family homes were a respective $467,140 and $406,500. Overall, prices remain relatively flat compared to last year. 

“This stable pricing provides an opportunity for buyers in our market. The addition of historically low interest rates, combined with a good selection of inventory, makes it a trifecta,” Stante says. “With positive wage growth in the wind, this is a signal, and a reminder, that this market opportunity will not remain forever.”

Condominium sales for the first 11 months of the year totaled 5,074, a five per cent rise over the same period last year. Inventory levels declined to 1,676 units, helping push down the months of supply. 

“The rise in condominium sales can be attributed to the confidence in the market, and is typical of this phase of a normal market recovery,” says Stante.

Condominium year-to-date average and median prices in 2011 were $287,545 and $261,500, respectively, a decline over the first 11 months of 2010, mostly due to increased sales in units priced under $200,000.