Calgary, August 3, 2010 – The summer cool down in Calgary’s housing market continued in the month of July, according to figures released today by the Calgary Real Estate Board (CREB®).

The number of single family homes sold in July 2010 in the city of Calgary was down 42 per cent from the same time a year ago, and condominium sales saw a decrease of 44 per cent from the same time a year ago.

July 2010 saw 915 single family homes sold in the city of Calgary. This is a decrease of 14 per cent from 1,061 sales in June 2010. In July 2009, single family home sales totalled 1,585. The number of condominium sales for the month of July 2010 was 396. This was a decrease of 11 per cent from the 445 condominium transactions recorded in June 2010. In July 2009, condominium sales were 702.

“Calgary’s housing market is cooling off after its record-setting pace in the post-recession period. This slow-down is not all that surprising in the face of tighter mortgage regulations and rising interest rates. The post-recession rally we saw in the summer of 2009 was unique and that pace couldn’t be sustained,” says Sano Stante, CREB® presidentelect.

“The sense of urgency seen last summer, fall and winter in the lead-up to tighter mortgage-lending measures has diminished,” says Stante. “Rising mortgage rates and increased inventories will be the primary head-wind facing Calgary’s housing market, but improving job prospects will offer some tail winds in the latter half of 2010 and into 2011.”

The average price of a single family home in the city of Calgary in July 2010 was $464,655, showing a 4 per cent decrease from June 2010, when the average price was $481,964, and showing an increase of 6 per cent from July 2009, when the average price was $436,782. The average price of a condominium in the city of Calgary was $291,168, showing no significant change from June 2010, when the average price was $292,238 and a 2 per cent increase over last year, when the average price was $285,032. Average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods, or account for price differentials between geographical areas.

“We are seeing relative stability in our average and median prices for the Calgary market,” says Stante. “A gradual return to moderate interest rates will not trigger any kind of steep decline in prices in our housing market. Prices may soften in select markets where inventory has bulked up, but for the most part they will remain relatively sticky as the economy improves.”

“Nonetheless with the combination of historically low interest rates and a large inventory of homes, there are some great buys out there—particularly in areas where comparable stock is ample such as the condominium and multi-family market. This presents a great opportunity to get into the market or to trade up,” adds Stante.

The median price of a single family home in the city of Calgary for July 2010 was $400,000, showing a 5 per cent decrease from June 2010, when the median price was $418,900, and a 3 per cent increase from July 2009, when the median price was $390,000. The median price of a condominium in July 2010 was $268,000, showing a 1 per cent decrease from June 2010, when the median was $269,900. That’s up 2 per cent from July 2009, when the median price was $263,000.

All city of Calgary MLS® statistics include properties listed and sold only within Calgary’s city limits. The median price is the price that is midway between the least expensive and most expensive home sold in an area during a given period of time. During that time, half the buyers bought homes that cost more than the median price and half bought homes for less than the median price.

There was a slowdown in the number of Calgarians putting homes up for sale in the month of July. Single family listings in the city of Calgary added for the month of July totalled 1,942, a decrease of 29 per cent from June 2010 when 2,733 new listings were added, and showing a decrease of 7 per cent from July 2009, when 2,089 new listings came to the market.

Condominium new listings in the city of Calgary added for July 2010 were 890, down 18 per cent from June 2010, when the MLS® saw 1,084 condo listings coming to the market. This is a decrease of 3 per cent from July 2009, when new condominium listings added were 918.

“Indeed Alberta and Calgary’s economic recovery is lagging behind the rest of the country right now. But on the bright side we see this trend reversing itself as we move into 2011. We expect Alberta to lead in economic growth and recovery—outperforming much of the country in 2011,” says Stante.

Government of Canada Mortgage Rule Changes

The following is the current understanding/interpretation of the technical rule changes now in

place for insured mortgage lending and is an informal, courtesy communication to our partners.

For verification and complete details, please refer to the Department of Finance

(www.fin.gc.ca/n10/10-11-eng.asp)

Qualifying Interest Rate.

For all loans with fixed rates on less than 5 year terms, and for all variable rate mortgages, regardless of term, the

qualifying rate must be the “benchmark” Bank of Canada 5 year posted rate.

• For loans with a fixed rate term of 5 yrs, the qualifying rate is the contract rate - which is actual rate that the

client receives.

• The “benchmark rate” is defined as the most recent Bank of Canada “Chartered Bank - Conventional

Mortgage 5-year rate” in the series V121764. For “benchmark rate,” updated each Monday, visit

www.bankofcanada.ca/en/rates/interestlook.html.

TDS Formula for Rental Income

• No longer able to use an 80% rental offset in the TDS formula. If the subject property generates rental

income, 50% of the gross rental income can be added to the borrower's gross annual income.

• Rental income from all other rental properties can be used, but must be verified via NOA's and T1

Generals. You can only gross up the net rental income by 15%.

Maximum Loan-to-Values

• Owner-Occupied Refinance: 90%

• Revenue Purchase/Refinance: 80%

• Stated Income Owner-Occupied Purchase: 90%

• Stated Income Owner-Occupied Refinance: 85%

Second-Home Purchases

• Now only available for single-unit properties (was 4-plex before) occupied at some point in the year by the

borrower-owner or a relative (on a rent-free basis). Owner-occupancy must be verified.

Business-for-Self

• Income (stated or confirmed) must represent the borrower’s total personal income on Line 150 of the NOA,

not gross business income. A “Gross Up,” or increasing this number by 15%, is still allowed.

Business-for-Self Stated Income

Borrowers who have been self-employed for more than 3 years will NO LONGER qualify under the CMHC Self-

Employed Product and must go on Line 150 of their NOAs.

• Genworth will continue to allow 3+ years self-employment.

• Commissioned borrowers will NO longer qualify; substantiating documentation required for commissioned

income is the 2 year average of Line 150 of the NOA

• Borrowers will continue to require two years of experience in the same field.

• Required to verify maximum length of self-employment via Business or GST Licence, or Articles of

Incorporation (or past three years of borrower’s NOA’s or T-4’s showing third-party income).