Calgary prices not too high, says real estate board

The chief economist with Calgary’s real estate board is downplaying a new report by a global rating agency that estimates home prices in Alberta are overvalued by about 15 per cent.

Ann-Marie Lurie says a lot of correction occurred in Calgary after real estate prices dipped in 2007.

"Moving forward, while I don't expect strong price growth, I do expect that we will continue to see price growth," she said.

Employment and migration growth tend to buoy prices in Alberta, said Lurie, who expects to see modest price gains this spring.

"Those two factors have really encouraged that growth in our marketplace. And because supply levels have tightened that has caused some of these price increases that we have seen."

The average price of a Calgary home was $457,179 in February, up seven per cent from a year earlier.

Although the Fitch agency says prices may be 20 per cent too high in some Canadian markets, in reality the rating agency says it's unlikely for prices to suddenly drop by that amount because of price momentum and inflation.

Fitch says the actual price decline in Canada could be closer to 10 per cent, taking place over several years.

Of course, the decline could vary greatly by region. Fitch says prices in Alberta would likely fall by several per cent, while in B.C. and Quebec the correction could be as high as 15 per cent.