When it comes to resale housing activity in Calgary this year, there are different scenarios being presented.

But while the presentations differ, the message is positive.

On one side, TD Economics says Calgary resale prices are overvalued and that a correction is coming in terms of sales activity.

On the other side, and with no beating around the bush, Canada Mortgage and Housing Corp.’s forecast says flat out that prices and deals finalized will both increase.

As for predictions from the Calgary Real Estate Board, they will have to wait until Bob Jablonski makes his inaugural address on Jan. 18 as the new president of the board, taking over from Sano Stante.

Historically, though, board figures tend to lean toward the forecasts offered by CMHC.

While Calgary will continue to be sensitive to the fluctuations in oil prices, Sonya Gulati, an economist with TD Economics, says the city is likely to continue “to lead the economic growth pack in 2012” — and that better than average economic and employment prospects should support both new and resale housing.

“We have positive gains on both fronts in our forecast for 2012,” she says.

Gulati was recently quoted as saying house prices in Canada are overvalued by 10 to 15 per cent, but she expected that gap to narrow.

Much of that over-valuation is because of the Toronto and Vancouver markets. For Calgary, she put the over-valuation at 7.3 per cent.

After seeing a 7.5-per-cent hike in sales from 2010 to 2011, this year will be flat at about 22,600.

As for Calgary prices, TD Economics has set it at $404,100 this year, compared with $402,200 in 2011.

With an expected increase in interest rates, price and sales declines might return in 2013, she says.

All the economic drivers in place in 2011 will likely still be present this year, says Gulati.

Matter of fact, later in the year when national sales and prices are on the decline, Calgary will “squeak out” gains, she says,

Senior analyst Richard Cho of CMHC says favourable economic factors at play in 2011 will hold for this year.

“Demand for housing is expected to further increase this year as the economy expands, creating jobs and attracting more people to the region,” he says.

Sales through the Calgary Real Estate Board are forecast to increase 2.3 per cent to 22,700.

For 2011, the large number of available properties served to hold down any sizable price movement.

This year might be different, says Cho.

“As the supply in the resale market moves lower and conditions become more balanced, stronger price growth is expected this year,” he says, adding that the CMHC forecast is for a 2.2 per cent hike to $411,000, up from $402,000 in 2011.

mhope@calgaryherald.com
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