As home prices in Canada are shown to be overvalued, home prices in Calgary have reached record levels

A new report on the state of the world's housing market says that house price overvaluation is especially marked in Canada. The survey from The Economist says that house prices are overvalued when compared to Canadians's earnings and also when compared to rental rates.

Calgary's house price average reached a record level, with an average house cost being $428,655 for 2012, the Calgary Herald reported.

Residential real estate sales in Calgary also saw a 15 per cent increase in volume, compared to the previous year.

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SEE: Average Price Houses In Calgary

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  • Valley Ridge: $425,000

    Building Type : Apartment Bedrooms : 2 Floor Space : 1574.77 square feet Storeys : 2 Highlight: Overlooks a golf course and river valley. Source: Realtor.ca

  • Valley Ridge: $425,000

    Building Type : Apartment Bedrooms : 2 Floor Space : 1574.77 square feet Storeys : 2 Highlight: Overlooks a golf course and river valley. Source: Realtor.ca

  • Valley Ridge: $425,000

    Building Type : Apartment Bedrooms : 2 Floor Space : 1574.77 square feet Storeys : 2 Highlight: Overlooks a golf course and river valley. Source: Realtor.ca

  • Valley Ridge: $425,000

    Building Type : Apartment Bedrooms : 2 Floor Space : 1574.77 square feet Storeys : 2 Highlight: Overlooks a golf course and river valley. Source: Realtor.ca

  • Connaught: $425,000

    Building Type : Apartment Bedrooms : 2 Floor Space : 1020.43 square feet Storeys : 1 Highlight: Nine feet ceilings, building amenities include a 5000 square feet courtyard, gym, steam rooms and an entertainment lounge. Source:Realtor.ca

  • Connaught: $425,000

    Building Type : Apartment Bedrooms : 2 Floor Space : 1020.43 square feet Storeys : 1 Highlight: Nine feet ceilings, building amenities include a 5000 square feet courtyard, gym, steam rooms and an entertainment lounge. Source:Realtor.ca

  • Connaught: $425,000

    Building Type : Apartment Bedrooms : 2 Floor Space : 1020.43 square feet Storeys : 1 Highlight: Nine feet ceilings, building amenities include a 5000 square feet courtyard, gym, steam rooms and an entertainment lounge. Source:Realtor.ca

  • Connaught: $425,000

    Building Type : Apartment Bedrooms : 2 Floor Space : 1020.43 square feet Storeys : 1 Highlight: Nine feet ceilings, building amenities include a 5000 square feet courtyard, gym, steam rooms and an entertainment lounge. Source:Realtor.ca

  • Spruce Cliff: $427,869

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 985.98 square feet Storeys : 1 Highlight: Spacious house with two large bedrooms, that each have their own bath. Source: Realtor.ca

  • Spruce Cliff: $427,869

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 985.98 square feet Storeys : 1 Highlight: Spacious house with two large bedrooms, that each have their own bath. Source: Realtor.ca

  • Spruce Cliff: $427,869

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 985.98 square feet Storeys : 1 Highlight: Spacious house with two large bedrooms, that each have their own bath. Source: Realtor.ca

  • Victoria Park: $429,900

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 1001.05 square feet Storeys : 1 Highlight: An apartment on the 20th floor that boasts incredible views. Source:Realtor.ca

  • Victoria Park: $429,900

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 1001.05 square feet Storeys : 1 Highlight: An apartment on the 20th floor that boasts incredible views. Source:Realtor.ca

  • Victoria Park: $429,900

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 1001.05 square feet Storeys : 1 Highlight: An apartment on the 20th floor that boasts incredible views. Source:Realtor.ca

  • Victoria Park: $429,900

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 1001.05 square feet Storeys : 1 Highlight: An apartment on the 20th floor that boasts incredible views. Source:Realtor.ca

  • Victoria Park: $430,000

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 979.52 square feet Storeys : 1 Highlight: The property listing states the condo has the best mountain and downtown views. Source: Realtor.ca

  • Victoria Park: $430,000

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 979.52 square feet Storeys : 1 Highlight: The property listing states the condo has the best mountain and downtown views. Source: Realtor.ca

  • Victoria Park: $430,000

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 979.52 square feet Storeys : 1 Highlight: The property listing states the condo has the best mountain and downtown views. Source: Realtor.ca

  • Victoria Park: $430,000

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 979.52 square feet Storeys : 1 Highlight: The property listing states the condo has the best mountain and downtown views. Source: Realtor.ca

  • Downtown East Village: $434,605

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 847.13 square feet Storeys : 1 Highlight: Property right in the middle of downtown and has views of the Bow River. Source: Realtor.ca

  • Downtown East Village: $434,605

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 847.13 square feet Storeys : 1 Highlight: Property right in the middle of downtown and has views of the Bow River. Source: Realtor.ca

  • Downtown East Village: $434,605

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 847.13 square feet Storeys : 1 Highlight: Property right in the middle of downtown and has views of the Bow River. Source: Realtor.ca

  • Downtown East Village: $434,605

    Building Type : Apartment Bedrooms : 2 + 0 Floor Space : 847.13 square feet Storeys : 1 Highlight: Property right in the middle of downtown and has views of the Bow River. Source: Realtor.ca

  • Evanston: $429,000

    Building Type : House Bedrooms : 3 Floor Space : 1716.86 square feet Storeys : 2 Highlight: Home has many upgrades and a spacious living space. Source: Realtor.ca

  • Evanston: $429,000

    Building Type : House Bedrooms : 3 Floor Space : 1716.86 square feet Storeys : 2 Highlight: Home has many upgrades and a spacious living space. Source: Realtor.ca

  • Evanston: $429,000

    Building Type : House Bedrooms : 3 Floor Space : 1716.86 square feet Storeys : 2 Highlight: Home has many upgrades and a spacious living space. Source: Realtor.ca

  • Evanston: $429,000

    Building Type : House Bedrooms : 3 Floor Space : 1716.86 square feet Storeys : 2 Highlight: Home has many upgrades and a spacious living space. Source: Realtor.ca

  • Whitehorn: $429,000

    Building Type : House Bedrooms : 5 + 1 Floor Space : 1779.94 square feet Storeys : 1 Highlight: Fully developed basement, drive way that can park an RV or four cards and a raised patio. Source: Realtor.ca

  • Whitehorn: $429,000

    Building Type : House Bedrooms : 5 + 1 Floor Space : 1779.94 square feet Storeys : 1 Highlight: Fully developed basement, drive way that can park an RV or four cards and a raised patio. Source: Realtor.ca

  • Whitehorn: $429,000

    Building Type : House Bedrooms : 5 + 1 Floor Space : 1779.94 square feet Storeys : 1 Highlight: Fully developed basement, drive way that can park an RV or four cards and a raised patio. Source: Realtor.ca

  • Whitehorn: $429,000

    Building Type : House Bedrooms : 5 + 1 Floor Space : 1779.94 square feet Storeys : 1 Highlight: Fully developed basement, drive way that can park an RV or four cards and a raised patio. Source: Realtor.ca

  • Kincora: $429,900

    Building Type : House Bedrooms : 3 + 0 Floor Space : 1743.77 square feet Storeys : 2 Highlight: Across the street from a park, close to a shopping center and the bonus room has nine feet high ceilings. Source: Realtor.ca

  • Kincora: $429,900

    Building Type : House Bedrooms : 3 + 0 Floor Space : 1743.77 square feet Storeys : 2 Highlight: Across the street from a park, close to a shopping center and the bonus room has nine feet high ceilings. Source: Realtor.ca

  • Kincora: $429,900

    Building Type : House Bedrooms : 3 + 0 Floor Space : 1743.77 square feet Storeys : 2 Highlight: Across the street from a park, close to a shopping center and the bonus room has nine feet high ceilings. Source: Realtor.ca

  • Kincora: $429,900

    Building Type : House Bedrooms : 3 + 0 Floor Space : 1743.77 square feet Storeys : 2 Highlight: Across the street from a park, close to a shopping center and the bonus room has nine feet high ceilings. Source: Realtor.ca

  • Auburn Bay, $429,900

    Building Type : House Bedrooms : 3 + 0 Floor Space : 1669.5 square feet Storeys : 2 Highlight: This house has a 'fierce' Jacuzzi hot tub, concrete patio and many upgrades. Source: Realtor.ca

  • Auburn Bay, $429,900

    Building Type : House Bedrooms : 3 + 0 Floor Space : 1669.5 square feet Storeys : 2 Highlight: This house has a 'fierce' Jacuzzi hot tub, concrete patio and many upgrades. Source: Realtor.ca

  • Auburn Bay, $429,900

    Building Type : House Bedrooms : 3 + 0 Floor Space : 1669.5 square feet Storeys : 2 Highlight: This house has a 'fierce' Jacuzzi hot tub, concrete patio and many upgrades. Source: Realtor.ca

  • Auburn Bay, $429,900

    Building Type : House Bedrooms : 3 + 0 Floor Space : 1669.5 square feet Storeys : 2 Highlight: This house has a 'fierce' Jacuzzi hot tub, concrete patio and many upgrades. Source: Realtor.ca

“Calgary’s housing market has finally started to recover,” said Ann-Marie Lurie, Calgary Real Estate Board's chief economist. “While (overall) prices remain shy of the highs recorded in 2007, this is a move in the right direction.”

As average home prices in Calgary hit a record, a global outlook from Royal Bank predicts that the Bank of Canada could boost interest rates by as much as half a percentage point before the end of the year.

SEE: WHAT HALF A MILLION WILL BUY YOU ACROSS ALBERTA

Economists have been divided over whether the central bank will boost rates this year or in early 2014.

Signs of improvement in the domestic economy have materialized over the past few weeks, with the December jobs report showing Canada created 40,000 jobs for the month, all of it coming from prized full-time positions. The unemployment rate also fell to its lowest in four years.

Calgary’s 2013 housing sector growth will ease both in terms of sales and price growth, differing from the declines expected on a national level,” Lurie said, adding that 2012 was the first time resale sales returned to more normal levels of activity.

While an increase in housing growth can be expected, it will moderate, says Lurie.

“It is expected that continued weakness in the natural gas sector, combined with the more cautious expansion approach in the oil sector, will persist this year. While economic activity will be strong enough to support moderate housing growth, the notion of an overheated housing market in 2013 is unlikely, given the economic backdrop.”

With files from CP

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