However, what many people want to know is whether or not the trend will continue into this New Year, and what they can expect in 2007.

In 2006, Calgary’ employment reached the highest number on record which meant an extremely low unemployment rate. Many industries and services competed heavily for labour, increasing wages in an attempt to attract potential employees. In 2006,  almost 26,000 new people moved to our city and 46,400 jobs were created. Approximately the same population increase is expected in 2007, so the situation is not expected to change much.

According to Lai Sing Louie, Senior Market Analyst with CMHC, our city is attracting more and more new people every day. “Many people are moving to Alberta because you can find work in a relatively short period of time if you’re not too picky,” says Lai Sing. “Calgary represents a tremendous amount of opportunity for young people. We’re seeing increases in wages and a very high level of job creation which is very attractive to those seeking work.”

What this means for the housing industry is that there has been and will be a lot of demand for homes which has consequently pushed up the prices. In 2006 the Multiple Listing System (MLS) showed an average price growth of 38 per cent. Lai Sing says that in 2007 the rise in price will impact demand as people step back a bit in order to save more money. “Coming up with a five per cent down-payment will be more difficult for some,” says Lai Sing.

“However, 2007 will still be a good year for the housing industry.” Lai Sing explains that this year construction is expected to continue at a phenomenal rate however, those units under construction will need to be absorbed which will see construction fall a little short of the record highs recorded last year. This doesn’t mean that the cost of housing will fall; quite the contrary. In 2006 the average absorbed new single-family home price was $353,662 and this year the average absorbed new single-family home price will be around $487,500; still another 37 per cent increase. This rise in price will continue to impact demand, and so the cycle continues.

This means that those in the rental market will find it necessary to save more money for a down-payment on a new home, which will keep them in the rental market a little longer and also serve to keep the average vacancy rate below one percent. Although it may take longer to save up for a new home, it’s definitely good news for those home owners who are discovering that their homes are worth much more than they were just a few years ago. 2006 caught a lot of people off guard and some people had a nasty surprise while others benefited quite nicely. Additionally, these increases have been good for the economy, with retail sales up 17 per cent from 2005 and the average wage increase reaching just under nine per cent, which in turn generates more spending – which is good news for 2007.  NL