Supply on the rise, but not across all price ranges

As we transition into winter, Calgary's housing market is following typical seasonal trends, with activity slowing compared to the fall. However, year-over-year demand remains relatively strong. In November, increased sales in detached, semi-detached, and row homes offset a decline in apartment condominium sales. The 1,797 sales for November mirrored last year’s levels and remained 20 per cent above long-term trends for the month.

The significant shift lies in supply. Inventory levels rose to 4,352 units in November, a notable increase from the 3,000 units reported last year. Despite the recent gains, inventory levels remain below long-term trends for the month.

“Housing supply has been a challenge over the past several years due to the sudden rise in population,” said Ann-Marie Lurie, Chief Economist at CREB®. “Rising new home construction has bolstered supply in rental, new home and resales ownership markets. However, supply improvements vary significantly by location, price range, and property type.”

The months of supply have increased to over two months, representing a shift away from the extremely low levels seen earlier this year and in the past three Novembers, which reported under two months of supply. While these more balanced conditions are promising for potential buyers, many market segments still favour sellers.

Improved supply options have tempered the pace of price growth. Year-over-year gains range from nearly seven per cent for row homes to nine per cent for apartment-style units. The total residential benchmark price reached $587,900, reflecting a year-over-year increase of just under four per cent. This slower growth reflects a shift toward more affordable row and apartment-style units. Seasonally adjusted prices have remained stable over the past four months despite unadjusted prices trending down in line with seasonal patterns.

Detached

Rising sales for homes above $600,000 offset the declines in the lower price ranges caused by limited supply choice. While inventory levels did improve, 85 per cent of the supply was priced above $600,000. Improving supply caused the months of supply to push above two months in November, with higher months of supply reported for homes priced above $700,000 and less than two months of supply for homes priced below that level. This variation within the market is likely to result in different price pressures.
 
The unadjusted detached benchmark price was $750,100, slightly lower than last month but over seven per cent higher than prices reported last year at this time. Year-over-year gains have ranged across the city, with slower growth reported in areas with the most competition from newer homes.  
 

Semi-Detached

There were 173 sales in November, an improvement over last year and contributing to the year-to-date growth of nearly five per cent. This was possible thanks to gains in new listings and higher supply levels. With two months of supply, conditions are not as tight as earlier in the year but still favour the seller, especially for properties priced below $700,000.

As of November, the unadjusted benchmark price was $675,100, nearly eight per cent higher than last November. The pace of price growth has eased over the past several months, primarily due to seasonal factors. Benchmark prices ranged from $926,800 in the City Centre district to $409,300 in the East district of the city.
 

Row

Row home sales improved in November compared to last year, contributing to nearly three per cent of year-to-date gains. Sales have remained exceptionally strong over the past three years as purchasers seek more affordable options. At the same time, new listings have also improved relative to sales, supporting year-over-year gains in inventory levels. Despite inventory improvements, conditions remained relatively tight with nearly two months of supply.

Following steep gains earlier in the year, the pace of price growth has eased. As of November, the unadjusted benchmark price was $454,200, nearly seven per cent higher than last year. Year-to-date average benchmark prices have improved by nearly 15 per cent. Row prices in the City Centre were the highest at $620,000, while the North East and East districts were the only areas to report benchmark prices below $400,000.
 

Apartment Condominium

Sales in November slowed over last year's record high. However, the 429 sales were still 47 per cent higher than long-term trends. New listings for apartment-style units have been on the rise. With 1,482 units available in November, more supply is available now than during the spring, and it is the only sector to see levels rise above long-term trends for the month.

The additional supply caused the months of supply to push above three months and is taking some of the pressure off home prices. As of November, the unadjusted benchmark price was $337,800, down over last month, but still nine per cent higher than last year. Supply has improved for units priced above $200,000, but most gains have been in the $300,000 to $500,000 range.  

Calgary Real Estate Market Report - OCT 2024

Sales gains for homes priced above $600,000 offset declines at the lower end of the market, resulting in October sales that were similar to last year. The 2,174 sales in October increased over September and stood 24 per cent above long-term trends for the month. “Housing demand has stayed relatively strong in our market as we move into the fourth quarter, with October sales rising over last month,” said Ann-Marie Lurie, Chief Economist at CREB®. “However, activity would likely have been stronger if more supply choices existed for lower-priced homes. Supply levels in our market are improving relative to the ultra-low levels experienced last year, but much of the gains have been driven by higher-priced units for each property type. This results in conditions far more balanced in the upper end of the market versus the seller's market conditions in the lower to mid-price ranges of each property type.”

The gains in new listings relative to sales over the past six months have supported inventory gains in the city. As of October, 4,966 units were available, a significant improvement over the near-record low of 3,205 units reported last October. While inventories are starting to reach levels more consistent with long-term trends, the inventory composition has changed as nearly half of all the residential inventory is now priced above $600,000.

Adjustments in supply are helping move the market away from the tight market conditions experienced in the spring. However, conditions remain relatively tight, with 2.3 months of supply and a 67 per cent sales-to-new listings ratio, and the months of supply does vary significantly by price range and property type. For example, detached homes priced below $700,000 are reporting less than two months of supply, while homes priced over $1,000,000 are reporting over three months of supply. This is likely resulting in different price pressures depending on price range and property type.

Overall, the total residential benchmark price was $592,500 in October, over four per cent higher than last October and on a year-to-date basis, averaging over eight per cent higher than last year's levels. The unadjusted benchmark prices did ease slightly over last month due to seasonal factors, as seasonally adjusted prices remained relatively stable in October compared to September.

Please read the full report here.

Rental Rates

• Metro Vancouver continues to record the highest average rent per square foot rate in Canada for the second quarter in a row.

• The lowest average per square foot rental rates among major cities tracked in Canada are in Edmonton despite rates in this market consistently increasing. Overall average rental rates for newer purpose-built rental buildings in Edmonton are up 34 percent from three years ago.

• Metro Vancouver was the only market to experience a decrease in per square foot rental rates, however only a modest decline. Most major markets in Canada experienced an increase in average rent per square foot values in Q1 2024.

• Downtown rental rates in the first quarter of 2024 were the highest in Metro Vancouver at $5.01 per square foot.

• Both Calgary and Ottawa continue to experience some of the strongest growth in downtown rental rates in Canada.

Vacancy

• Vacancy among stabilized projects in the first quarter was the lowest in Metro Vancouver at 1.2 percent with Calgary having the second lowest at 1.5 percent.

• Stabilized vacancy was highest in the GTHA and Kelowna at 2.8 and 2.7 percent, respectively.

• The GTHA continued to record the highest overall vacancy at 10.8 percent for the second quarter in a row as more than 1,700 units have been recently added to the market. Overall vacancy did go down in the GTHA, indicating strong rental demand and the ability to absorb new product in this market.

• Edmonton and Calgary were the only markets where overall vacancy increased in the first quarter of the year, which can be attributed to seven and eight new project launches occurring respectively over the past three months.

(By Zonda Urban)

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.

TOP CONSIDERATIONS FOR 2022:

COVID-19 IMPACTS ON ECONOMY AND INFLATION- Supply disruptions caused by COVID-19 are expected to ease in 2022. However, if new variants emerge that delay a full re-opening, this could impact the economic recovery, while prolonging supply challenges and inflationary pressure.

LENDING- The Bank of Canada is expected to increase interest rates in 2022. While gradual gains are anticipated, rates are expected to remain below pre-pandemic levels – low enough to continue to support housing demand, but not at the pace seen in 2021.

POPULATION- The flow of migration will be an important component of sustaining high levels of demand in housing markets.

HOUSING SUPPLY- New construction and elevated levels of listings in the resale market are expected to help add to the undersupplied housing market. The spring market is expected to remain relatively tight, but if supply levels do not start to improve in the second half of the year, this will have significant implications for home prices.

It will take time for the housing market to move out of sellers’ conditions, supporting further price gains this year.

EMPLOYMENT

Following the dramatic decline in jobs in 2020, it is not a surprise that employment levels increased by over four per cent in 2021. Employment gains since September, in particular, were exceptionally strong in Calgary. As of December, employment levels pushed above 833,000, higher than pre-pandemic levels and just shy of peak employment that occurred in June 2019.

Job growth occurred for both full- and part-time positions across a wide range of industries. As of December 2021, sectors such as construction; wholesale and retail trade; finance, insurance and real estate; and professional and technical services not only recovered from the start of the pandemic, but soared to near or above previous highs in the market. These improvements, especially in the professional and technical services sector, will help support further demand growth in the housing market.

Employment gains are expected to continue into 2022, with annual gains forecasted to rise by nearly five per cent. With COVID-19 expected to be mostly behind us, the largest gains in jobs are expected in some of the hardest hit areas, including accommodation and food; arts, entertainment and recreation; and transportation and warehousing. Further gains are also expected in some of our higherpaying industries, including the primary, utilities and manufacturing sectors. The only sector expected to see additional pullback is educational services.

Unemployment rates are also expected to trend down, but to levels that remain higher than pre-pandemic levels. This is, in part, due to gains in the labour force, as more people re-enter the job market. This could also be related to some of the concerns regarding the mismatch between job seekers and job availability.

Some sectors have been struggling to find qualified workers despite higher unemployment levels, somewhat evidenced by rising job vacancy rates. The mismatch would likely also create divergent trends in wages, with sectors experiencing high job vacancies seeing steeper wage growth relative to other sectors. To date, wages have been generally trending up, but not necessarily at the same pace as inflation, impacting growth in disposable income in 2021. As we move into 2022, wages are expected to rise, supporting gains in household income.

Please read the full forecast here.

In 2020, housing markets across the country surprised many with a stronger-than-expected rebound in the second half of the year despite record-high unemployment rates and significant job losses.

Calgary did not hit record-high sales or prices in the third or fourth quarters, but still posted some of the strongest sales relative to the past five years. This was nearly enough to offset the initial losses recorded during the first shutdown caused by the pandemic.

It is expected some of the momentum recorded at the end of 2020 will continue into 2021, fuelled by exceptionally low lending rates and pent-up demand. While sales are expected to rise by nearly five per cent on an annual basis in 2021, persistent economic challenges are expected to prevent stronger growth in our housing market.

Reduction in supply relative to sales is the primary reason the Calgary housing market returned to more balanced conditions by the end of 2020. The pullback in new listings relative to sales activity resulted in inventory levels falling to the lowest levels seen in the past several years.

As we move into 2021, we anticipate new listings will start to rise, as COVID-19 likely caused many homeowners to delay listing their homes. We could start to see some supply come back in 2021, as concerns regarding the spread of the virus ease. Persistently high unemployment rates could also weigh on some existing homeowners who may need to sell their homes.

Growth in supply is expected to offset some of the gains in sales, pushing our market to the upper bounds of balanced conditions and slowing price recovery. However, the price gains that occurred at the end of 2020 are not expected to be eroded and 2021 annual prices are forecasted to improve by over one per cent.

NEW HOME & RENTAL

Slowing economic conditions spread to the new-home sector in 2020. Starts in the city declined by 22 per cent in 2020. Most of the decline was driven by multi-family starts, which had eased by 31 per cent. Slower starts contributed to the decline in new-home inventories from the peak levels recorded early in the year.

The slower activity in 2020 will help prevent further supply pressure to the market over the near term. Starts levels in 2021 are expected to remain low relative to historical levels. This will help slow the supply pressure coming from the new-home market.

Slower migration, combined with completions of new purpose-built rental product, is impacting rental market vacancies and rental rates. As it will take time for borders to open and international migration to return, the rental market is expected to continue to struggle into 2021.

According to Urban Analytics, newer purpose-built rental saw occupancy rates fall, as the addition of new supply created a challenging rental market. They also noted many landlords were providing free rent incentives and rental rate reductions.

With more projects expected to be completed over the next year and migration patterns expected to remain slow, absorption of the rental product will be slow, keeping vacancy rates slightly elevated and ensuring rent incentives will remain persistent in the market.

Low interest rates are likely encouraging many first-time homebuyers to enter the ownership market. However, ample rental supply, rental incentives and significant uncertainty in the economy could reduce any sense of urgency among current renters considering a shift into ownership, potentially preventing stronger sales growth in 2021.

Please read the full forecast here.

The Alberta economy continues to struggle. 2019 marks the fifth year since oil prices first collapsed. Following widening price differentials and continued difficulties getting energy product to market, we saw governments step in with production curtailments. This helped narrow the spread on price, likely preventing further pullbacks, but it also weighed on energy investment activity and overall economic growth.

The continued challenges have caused Alberta to move into the category of slowest growing economy in 2019 compared to other provinces. Shifts to ease curtailments in 2020 and additional transportation capacity are expected to support some economic growth this year. However, global risk will likely create volatility in oil prices and Investment activity is not expected to change, remaining at half the levels that were seen prior to the 2014 oil price crash.

While several mechanisms have been put in place by the provincial government to encourage business investment and support diversification, at the same time, recent budget constraints could impact growth in the public sector. The shifts to encourage business investments will likely take longer to take hold, while the easing in the public sector will be more immediate. The result is an economy that is expected to be marginally better in 2020, keeping housing markets stable at lower levels in 2020.

TOP CONSIDERATIONS FOR 2020:

• A new normal in the market: supply adjusting to slower sales activity, providing conditions that are more supportive to a stable price environment.

• Market improvements are expected to be driven by gains for lower priced product, while easing prices and oversupply persist in the upper price ranges.

• Supply adjustments are expected to continue, helping to eventually push the market toward balanced conditions.

• Prices are expected to stabilize over the year, but remain just slightly lower than last year’s annual levels.

• Stable mortgage rates, previous price declines and job growth should support modest improvements in sales, but these will remain at lower levels.

• Employment risk weighs on the market, which could result in further declines in sales and prices.

Please read the full report here.

• If conditions in the energy sector get worse, this could have downside risk on confidence, employment and wages, creating persistent oversupply and steeper-than-expected price declines in the housing market.

• Signs of supply adjustments are present in the market. If the downside risk is averted, then the amount of oversupply should start to ease by the end of the year. • Unless the Canadian economy underperforms, further rate increases are expected in 2019. This will impact housing demand

• If new-home inventories and product under construction do not ease, this will prolong buyers’ market conditions in the housing market.

• Provincial and federal elections could result in changes to government spending, policies and confidence in the market.

• For those considering ownership, further resale price declines can make the resale market more attractive to purchasers compared to new homes.

The challenging economic climate in Calgary is expected to persist into 2019. While there was some evidence of stabilization in the energy sector in early 2018, issues surrounding the price differential of oil, falling global prices, a lack of market access and ability to attract investment are placing current and future growth at risk. The economic impact of recent events is not expected to translate into another recession in 2019. However, it will impact employment opportunities, consumer confidence and the housing market.

On top of energy sector concerns, we are in an environment of stricter lending conditions and higher interest rates. The Canadian economy is growing, supporting further expected gains in interest rates in 2019. Higher rates and stricter requirements come at a time when the Alberta economy still struggles with employment and wages. With further rate increases expected in the second half of 2019 and no significant improvements in the job market, resale sales activity is forecasted to remain low compared to historical standards.

Please read the full report here.

Calgary, July 3, 2018–

Many Canadian energy-related municipalities within Alberta and Saskatchewan have seen housing markets struggle over the past few years, resulting in price declines.

The recent mortgage rule changes and higher lending rates are factors weighing on demand and prices across some of those areas.

“While our economy is no longer in a recession, persistently high unemployment rates, concerns over long-term growth, rising lending costs and stricter qualifications are all weighing on the housing demand,” said CREB® chief economist Ann-Marie Lurie.

“Growth in new listings is starting to ease for some property types, but it is not enough to prevent continued supply growth and, ultimately, an oversupplied housing market.”

Weak sales activity in Calgary continued into June, as residential sales for the month totaled 1,896 units. This is 11 per cent below last year and 12 per cent below long-term averages. New listings continued to rise, with further inventory gains and months of supply now at 4.7 months.

High inventories in comparison to sales have generated more widespread buyers’ market conditions, causing downward pressure on prices. The city-wide benchmark price in June totaled $436,500. This is just below last month and 1.13 per cent below last year’s levels.

The detached segment of the market accounts for over 60 per cent of overall sales activity and makes up over 54 per cent of the inventory, with 4,817 units as of June. While sales have fallen and inventory has been rising across most price ranges, inventory levels for homes priced under $500,000 remain well below peak levels.

“In any market it’s extremely important to be well-informed, whether it’s about the process to get pre-approved for a mortgage or having the most up-to-date information about the prices in the community you are buying or selling in,” said CREB® president Tom Westcott.

HOUSING MARKET FACTS

• Detached sales eased while new listings rose across most districts in the city after the first half of the year, keeping inventories elevated.

• The quarterly average months of supply increase compared to last year across all districts, keeping most areas in buyers’ market territory for the second quarter.

• As of the second quarter, detached benchmark prices totaled $504,033. This is just above the previous quarter, but 0.41% below last year’s levels. North East, North, North West and South districts recorded year-over-year quarterly price declines. However, only the North East district saw prices slip further over level recorded in the first quarter of this year.

• After the first half of the year, apartment sales totaled 1,396 units. This is nearly nine per cent below last year and 24 per cent below long-term averages. Easing sales were met with a decline in listings, helping to limit further growth in inventory levels. As of June, there were 1,872 apartment units in inventory, causing the months of supply to ease, averaging 6.8 months for the quarter.

• While most areas of the city are struggling with oversupply, there does appear to be some improvements. While remaining far from long-term averages, In the second quarter the months of supply edged down over first quarter levels in the city Centre, North, North West, West, South and East districts.

• The easing of the oversupply in most districts helped prevent further declines in quarterly benchmark prices. However, overall second quarter prices remain over three per cent below last year’s levels, and nearly 14 per cent below the quarterly high.

• Year-to-date sales activity fell for both semi-detached and row product across most districts, but new listings remained similar to last year in the row sector, while increasing by 22 per cent for semi-detached property types. This resulted in stronger inventory gains in the semi-detached market and pushed up the quarterly months of supply to above five months

• While row product did not see the same recent increase in inventory, gains in the previous quarters have not eased, causing the second quarter months of supply to total 5.47. This is similar to last quarter and above the second quarter of 2017 figure of 3.66.

• Semi-detached and row benchmark prices averaged $419,000 and $301,833 in the second quarter. Row prices were nearly 2 per cent higher than the previous quarter and nearly three per cent above last year’s levels. Meanwhile, semi-detached prices were similar to the first quarter, but over two per cent below 2017 levels.

• While some easing in the semi-detached market has occurred, quarterly prices are only two per cent below quarterly highs compared to the row sector which remains over 8 per cent below quarterly highs

Calgary, June 1, 2018 – 卡尔加里五月份房地产销售持续减缓，尤其的独立屋市场成交大幅下滑（应该是消费者信息不足）。同时，新上市房源却持续攀升。 整个城市上个月仅成交1,726 单元，比2017年同期降低了19%，比长线均值降了24%。其中独立屋产品段的成交量下降到了10几年来罕见的状况。（今早客户打电话咨询买房子的事，还提到目前很多工程公司都裁员了，她也被layoff了。经济的复苏，还是挺艰难的，就只听见银行不断的涨息，BC + AB不停的打起来。有些人感觉就业怎么还不如去年？）。

"贷款利率的提高、以及申请贷款的日趋艰难导致了买家对于房地产各个产品段的需求都有所减缓，" CREB®房地产局首席经济学家Ann-Marie Lurie说到，"经济条件比前几年回复了一些，但是复苏的缓慢还没有国家贷款政策调整的步伐快，一轮又一轮的"。 市场供给却没有减缓，所以目前供给房源消化月份增加到4.9个月。（卖家要是想挂牌，做好签约6-12个月的准备，要不然价格还没有降到位，合同就已经到期了）。 由于供给量仍然攀高，整个城市价格复苏之路还是缓慢的，五月底市场基准价格为$436,900，和过去6个月差不多，比去年同期低了0.6% 。 独立屋供给量在各个价位区间都增加了，但是增加量最多的是50万以上的价格区间。高价位段的房源在市场上的天数和过去几年相比，依然很高，好在比2008-2009年的经济危机时期还是要短一些。 "贷款政策的调整也抑制了很多买家调换到大房子去，同时还有一部分人则等着市场调整到他们期待的状况才出手。然而，很多社区并没有大幅房源上市，所以对于消费者来说熟悉想要购买的社区、做好功课也很重要。" CREB® 房地产局主席Tom Westcott最后补充说到。

更多卡尔加里房地产资讯，请查看链接。

Prices Remain Stable Amid Economic Challenges

City of Calgary, May 1, 2018 – Calgary's real estate market continues to experience challenges as mortgage lending policy changes and ongoing economic recovery struggles impact sales. Weakened consumer demand and increasing inventory levels have prevented price recovery, maintaining a sluggish market.

CREB® Chief Economist Ann-Marie Lurie explained:

"The slowdown in sales is not surprising, as the economic recovery has not been strong enough to offset the impact of mortgage policy changes. While inventory levels have risen, prices have remained relatively stable, with some areas seeing price increases while others experience declines."

Market Performance

April sales remained weak, totaling 1,518 transactions, representing a 20% decrease from 2017 and 25% below the long-term average. The detached home segment experienced the most significant decline in 2018, with 2,991 units sold year-to-date, 27% below the 10-year average.

As of April’s end, active inventory stood at 7,324 units, marking a 32% increase compared to 2017. However, this remains significantly lower than the 10,129 units available during the 2008 market peak. Despite the growing supply, prices have remained relatively stable, with the city-wide benchmark price at $436,500, reflecting a 0.21% increase from both April 2017 and March 2018.

CREB® President Tom Westcott noted:

"The reality is that buyers now have more choices during the traditionally busy spring market. For sellers, they need to decide on their pricing strategy based on their individual circumstances and motivations. Meanwhile, buyers must understand that different locations and property types vary significantly, or they may misjudge their negotiation leverage."

Segment-Specific Trends

Condominium and townhouse sales have dropped to 2016 levels, while inventory in these segments has surged. This has resulted in properties remaining on the market for an average of over four months, significantly restricting price growth.

As Calgary's real estate market navigates economic headwinds and policy shifts, both buyers and sellers must remain strategic in their decision-making to adapt to evolving market conditions.