Elevated lending rates are expected to weigh on sales in 2023, bringing levels down from the record-high in 2022. However, with forecasted sales of 25,921 in 2023, levels are still expected to be higher than the activity reported before the pandemic. Recent growth in migration and employment is expected to help offset the impact of higher lending rates, keeping annual sales activity higher than levels achieved throughout the 2015 to 2019 period.
The growth in new listings in 2022 was not enough to offset the gains in sales and supply levels have remained low, especially for lower-priced product. The higher lending rates are also expected to weigh on listings growth in 2023 as it has become more challenging for a move up buyer. While improved starts are expected to help support supply growth, thanks to the strong migration levels, supply levels are not expected to report significant gains.
The low starting point and limited upward pressure on supply in 2023 is expected to prevent any significant downward pressure on prices as demand normalizes. However, conditions are expected to vary depending on price range and property type. Higher-priced homes are expected to see some downward price pressure as that segment of the market is not experiencing the same supply constraints. Meanwhile, supply declines relative to sales for lower priced properties are expected to continue to support modest price growth. Declines in the upper end of the market are expected to offset gains in the lower end of the market as total residential prices in Calgary are expected to stabilize in 2023.
TOP CONSIDERATIONS FOR 2023:
LENDING RATES With rates not expected to ease until 2024, higher lending rates throughout 2023 are expected to weigh on housing market demand.
MIGRATION Recent gains in migration are expected to offset the impact of higher lending rates, keeping sales activity stronger than pre-pandemic levels.
EMPLOYMENT Recent job growth in industries beyond what was impacted through the pandemic is expected to prevent a more significant adjustment in sales activity.
SUPPLY Low inventory levels especially for lower priced product is expected to prevent widespread price declines in our city.
Please read the full forecast here.
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