Calgary is headed into its third year of record-setting home sales, which experts say has been prompted by residents looking for more space while we are all working from home and staying in more often. Many property owners are reporting being able to unload their homes in lightning-fast time – often in less than a day. It’s great news for sellers, and the trend appears to be going strong, even as we are (hopefully) nearing what may be the end of the pandemic.
Province-wide, total housing starts in Alberta in 2021 were 33% higher than in 2020 and 17% higher than in 2019. With 31,935 homes changing hands, the numbers were the best they have been since 2015, when 37,282 properties were sold. Single detached homes were by far the most popular sales, at 38% above the pre-COVID level set in 2019.
The Calgary Real Estate Board (CREB) provides monthly updates of housing statistics, and December 2021 topped a very good year. Single-family home sale numbers reached 1,737 during the month, which was an increase of 45% over 2020. Prices rose about 10% to an average of $547,300. Semi-detached, row houses, and apartment/condos also climbed in value, although not nearly as much. As inventory continues to fail to meet demand, it’s predicted that prices will keep going upnfor some time as buyers are currently striving to beat what is expected to be an increase in interest rates this year.
Does a higher property assessment mean more insurance is necessary?
As Calgary real estate values rise, it’s not surprising that owners are wondering whether they should increase their home insurance coverage. It’s never a bad idea to check in with your home insurance provider to ensure your coverage remains adequate for your home, however property values rising due to increased market demand does not necessarily mean an increase in home insurance rates. The actual market value of your home does not have a lot to do with the calculations of your premiums. Home insurance rates are determined by the cost it would take to rebuild your home and replace its belonging should something disastrous happen. However, if you have added value to your property through renovations, or a new entertainment centre, or upgrades to your yard and outdoor space, you should definitely let your home insurance provider know. That way you can be sure your coverage reflects the type of home you have and you won’t have any issues should you have to file a home insurance claim.
Rising property taxes in Calgary
Although home insurance rates shouldn’t rise with an increase in property value, property taxes correlate directly with your home’s worth. Property taxes in Calgary are assessed annually, with some of the factors included in the valuation being:
- Total finished living area above grade
- The state of the structure
- The age of your home
- How many renovations have been done
- What type of home it is (standalone, condo, duplex, townhouse, etc.)
- Any views that can be enjoyed from your property
Last year’s Property Tax Bylaw 11M2021 put the residential municipal property tax rate at 0.0048250 and the provincial tax rate at 0.0025818 for a total residential tax rate of 0.0074068.
You can figure out what your property taxes should look like by multiplying your property assessment by the tax rate for that year. If your property was assessed at $500,000, the formula would be: $500,000 x 0.0074068 = $3,703 or about $309 per month. If you perform your calculations and your tax assessment doesn’t seem to add up, make sure to call the City at 311. Citizens can choose to pay their taxes all at once at the end of June or each month through the City’s Tax Installment Payment Plan System (TIPP) system.
Although there’s more cash coming out of the pockets of Calgarians, the Calgary Herald reported in November the city itself will benefit from a larger tax base. In 2018, the City of Calgary collected $266 billion from residential properties. In 2022, that number is set to be $279 billion. About 65% of all residential property taxes goes towards City services, such as maintaining our many roads and pathways, police and fire protection, garbage collection, transit, parks and recreation. The other 35% is sent to the Government of Alberta.
A professional home inspection can be invaluable
If you are in the market for a new home, always have your real estate agent specify that the sale is contingent on a satisfactory home inspection done by a professional home inspector of your choice.
Home inspectors in Alberta must be licensed and should show their identification before starting their work. There are a number of ways home inspectors and financial advisors (who may also act as home inspectors) may obtain certification, but each must attain a license from the Government of Alberta, be bonded, and carry errors and omissions insurance. Also be sure to check their references.
There’s no assurance like good home insurance
Lane’s Insurance is a leading Alberta insurance broker offering the very best in home insurance coverage for complete peace of mind. We work for you, not the insurance companies, and therefore can provide non-biased, expert advice and a number of different options from Canada’s most respected home insurance providers. At Lane’s, you will be partnered with a specialist who will be your personal contact for all things insurance. Even though we may not be your provider, we are always your source for good information and no obligation quotes.