Alberta housing and mortgage overview

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		3,474,000	32,568,000
Consumer Price Index (2002=100)		-	0.00
Average earnings (SA, $)		-	$0.00
Unemployment rate (SA, %)		-	%
Housing starts (SAAR, thousands of units)		-	0.00
Average Residential Resale Price (annual % change)	2007 (E)	$355,000 24.4%	$306,397* 10.6%
	2008 (F)	$369,000 3.9%	$322,400* 5.2%
	2009 (F)	$389,000 5.4%	$334,500* 3.8%
Mortgages approved by lenders, residential 2006	Chartered banks	$27,421,550,000	$152,478,903,000
	Trust companies	$1,287,091,000	$6,664,898,000
	Life and companies other	$5,378,952,000	$30,225,144,000
	Total	$34,087,593,000	$189,368,945,000

2007 E = estimated by the CMHC
* 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
Calgary	2007	13,505	32,176	$414,066
	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