The average selling price of a single-family home in St. Albert jumped to $460,000 in April, a 2.8 per cent increase over the first quarter average and 14 per cent higher than April 2009.
In Morinville, the average for a single-family home was $329,000, a two per cent jump from the first quarter average and nine per cent over April of last year.
These increases ran counter to the general trend recorded in the Capital region, where the average price of a single-family home fell in April.
In St. Albert, the average condominium price rose to $276,000 in April, a 1.2 per cent increase from the first quarter average and 10 per cent higher than last year.
ATB economist Dan Sumner expects to see a mild cooling of real estate prices in the coming year, due to rising mortgage rates. While the last week has seen a number of banks cut their mortgage rates in response to economic uncertainty in Europe, Sumner believes these declines are a temporary reprieve from the trend toward higher rates.
“Over the past nine months the housing market in Alberta was buoyed by extraordinarily low interest rates. Now we’re going to see that stimulus taken away so things should cool down,” Sumner said.
He expects future prices to remain consistent with the average of the last six months.
Household debt in Canada reached a new high of $1.41 trillion in December 2009, according to a survey conducted by the Certified General Accountants Association of Canada.
If this debt, which combines mortgage and consumer debt, was spread among all Canadians, it would amount to $41,740 per person, an amount 2.5 times greater than 1989.
“This report is another indication of Canadians’ readiness to consume today and pay later,” said Anthony Ariganello, president and CEO of CGA-Canada. “The concern is do they understand the full cost of paying later?”
If mortgage rates rise by two percentage points, mid-income to mid- to high-income families may have to cut their discretionary spending by nine to 11 per cent if they wanted to maintain the same levels of spending on shelter, taxes, food and transportation, he said.
The survey found that 78 per cent of respondents would not change their savings patterns to build or rebuild a financial cushion they believed right for them. Personal lines of credit represent 60 per cent of consumer credit issued by chartered banks, it found.
“Canadian households’ use of financing is one of the few things that did not noticeably adjust to a changing economic reality,” said co-author Rock Lefebvre.
