Provincial And Federal Government Stimulus Packages To Have
A Direct Effect On Specific Calgary Home Values
2009 Calgary Transportation Effect
Research Report Concludes That Some Property Owners Will Receive a 10 - 20% Increase in Their Property Values

Calgary, AB — May 27, 2009 — The Real Estate Investment Network (REIN™) a Division of Cutting Edge Research Inc. is pleased to release its latest update to The Calgary Transportation Effect, which details the impact of the upcoming transportation improvements on housing, part of the government stimulus packages, on housing in Calgary.  The report’s research estimates that prices in select Calgary’s neighbourhoods will receive a 10% to 20% premium, over and above what the rest of the city’s market does in the coming years.

“Our tax dollars are being spent; this is an opportunity for average Calgarians to profit from those dollars.  When people look for a property to purchase — be it their primary residence or an investment property — they take into consideration affordability, commute times and commute costs,” said Don Campbell, the report’s lead author and president of the Real Estate Investment Network. “If you can reduce commute and travel times to and from an area, you make that area much more desirable as a place to live, and thus an increase in demand occurs.”

There is a national focus on building infrastructure with a major focus on transportation improvements.  Transportation is one of the twelve key fundamentals that drive real estate values up or down. This report focuses on how the completion of the Ring Road and the expansion of the C-Train will improve accessibility to the downtown core, which in turn will raise the value of real estate that is in close proximity to these transportation improvements.

Transportation accessibility is one of the twelve key fundamentals that drive real estate values up or down. This report focuses on how the completion of the Ring Road and the expansion of the CTrain into the northwest and northeast will improve accessibility to the downtown core, which in turn will raise the value of real estate that is in close proximity to these transportation improvements.

Their research has found that there are three “Tiers of Impact” that will occur in the Calgary region:

First Tier: which will witness the most positive effects from the combined transportation improvements: NE — Saddle Ridge, Martindale, Falconridge, Taradale, Castleridge; NW — Rocky Ridge, Tuscany, Scenic Acres, Ranchlands, Silver Springs, Hawkwood.

Second Tier: which will also feel positive impacts: NE —, Coral Springs, Temple, Montery Park, Pineridge, Abbeydale, Applewood Park, Marlborough Park, Penbrook Meadows; NW — Bowness, Greenwood, Valley Ridge. SE — Chapparal, McKenzie Lake, and Sundance.

Third Tier:  regions will feel the ripple effect outward from the main impact areas; these include Cochrane, Balzac and Airdrie, as well as new developments near the Ring Road.

When the Ring Road and the new LRT stations are completed (2009 for the northwest leg of the Ring Road), communities within an 800-metre radius of these transportation improvements can anticipate a 10%–20% increase in their property values. The largest effect will be felt in older and more established neighbourhoods.

“Gone are the days when you could get downtown from anywhere in Calgary in under half an hour. Accessibility to highways and the LRT is now a top priority for home buyers and renters,” adds Campbell. “These transportation improvements will unleash the inherent value in these markets, such that in the future these areas will outperform the rest. If the market goes up everywhere, these areas will increase by about 10%–20% more. If the values everywhere drop, these will drop by 10%–20% less.”






 

Rural Real Estate Follows City Lower Home Values
By Mario Toneguzzi, Calgary Herald

CALGARY - The town and country and rural residential housing market is mirroring what’s happening in the city during the first quarter of this year.

MLS sales in towns outside Calgary are down by 37 per cent compared with a year ago, while the average MLS sale price has dropped by

12 per cent.

The country residential market, which includes acreages, has seen sales drop by just over 51 per cent, while the average price has fallen by just over five per cent on a year-over-year basis.

“That marketplace is a bit softer than what we’re seeing in the city,” said Lai Sing Louie, senior market analyst in Calgary for Canada Mortgage and Housing Corp.

“It’s taking longer to sell in the country residential areas — almost twice as long to sell a property relative to the city. Sales are also lower in that market. There’s also downward pressure on prices. So in terms of the market balance, it’s in buyer’s market conditions. There are a lot of sellers relative to buyers.”

According to recent Calgary Real Estate Board data, total sales for the first three months in towns outside Calgary were down 36.94 per cent to 623 units compared with the same period in 2008 and the average sale price dropped by 11.9 per cent to $341,601.

In the country residential market, total sales fell by 51.18 per cent to 83 units, while the average sale price decreased by 5.35 per cent to $795,871.

Rural land sales have also fallen in the first quarter compared with a year ago. In the first three months of this year, there were 24 rural land sales, down by 57 per cent. The average sale price was also down by 21.6 per cent to $448,117.

With the growth in condominium demand in Calgary, people are choosing to make a greener decision for how they want to live, said Don Campbell, president of the Real Estate Investment Network in Canada and author of three books on the real estate market.

There are not a lot of condo-style options, such as high-density ones, outside of the city and some people may be thinking that it is costly — and not environmentally friendly — to drive their vehicles each day back and forth from work if they live outside Calgary.

Affordability is another factor, he said.

“There aren’t a lot of lower-priced properties in Cochrane or Airdrie or Okotoks because there aren’t a lot of condo-style properties available,” he said.

“If you take a look at the numbers in Calgary, the first-time homebuyers are really driving and sustaining the market right now because of the ridiculously low interest rates,” said Campbell.

In Calgary metro, overall sales for single-family homes in the first quarter of this year are down to 2,458, which is 34.4 per cent lower than the first three months of 2008 and the average sale price is down by 10.87 per cent to $417,187. In the condo market for the same period, sales are down by 35.9 per cent to 1,011 units, while the average sale price is off by 11.5 per cent to $275,975.

Campbell said the pendulum swings more frequently in the smaller communities because they are smaller markets and the percentage change can be more volatile.

The following is a comparison of some areas just outside Calgary and their residential MLS sales numbers and average sale prices for the first quarter of this year and the first quarter of 2008:

n Airdrie: 157 sales, $307,403 for 2009; 268 sales, $350,496 for 2008;

n Chestermere: 34 sales, $400,655 for 2009; 50 sales, $526,014 for 2008;

n Cochrane: 52 sales, $354,199 for 2009; 61 sales, $450,536 for 2008;

n High River: 53 sales, $327,328 for 2009; 50 sales, $315,761 for 2008;

n Okotoks: 100 sales, $379,757 for 2009; 181 sales, $375,586 for 2008;

n Rural Foothills M.D.: 27 sales, $684,396 for 2009; 79 sales, $797,981 for 2008;

n Rural Rocky View M.D.: 48 sales, $880,885 for 2009; 77 sales, $961,704 for 2008;

n Strathmore: 51 sales, $286,583 for 2009; 88 sales, $328,815 for 2008.

Louie said the city is “firming up” in terms of market balance quicker than the outlying areas primarily because there are not as many transactions in the country.

“In terms of how the markets have adjusted, the city area seems to be adjusting a little quicker than the outlying areas,” he said, adding that when house prices were rising in the past few years they did so quicker in the city and then that trend spread to other areas.

Now the same thing is happening on the downward trend.

“The surrounding areas tend to follow suit,” he said.

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