The Calgary housing market in 2023 was characterized by strong migration and persistent low supply, contributing to robust sales and driving prices to new record highs. Despite a slight easing in sales compared to the previous year, with 27,416 transactions, levels remained significantly higher than pre-pandemic norms. Notably, there was a shift towards more affordable apartment-style condominiums.
“Higher lending rates dampened housing demand this year, but thanks to strong migration levels, housing demand remained relatively strong, especially for affordable options in our market,” said CREB® Chief Economist Ann-Marie Lurie. “At the same time, supply levels were low compared to the demand throughout the year, resulting in stronger than expected price growth.”
The supply-demand imbalance resulted in stronger-than-expected price growth. Inventory levels consistently lagged behind long-term trends, leading to a 44% decline compared to the 10-year average. The tight conditions contributed to a new record high average benchmark price, with annual growth slowing from 12% in 2022 to almost 6% in 2023.
The Calgary and surrounding areas Real Estate Markets are poised for another significant year. Anticipated price appreciations, coupled with new challenges in the supply and a consistently growing demand, are expected to persist well into 2024.
The Bank of Canada is projected to maintain steady rates until at least the halfway point of 2024, with a modest easing expected in the summer/fall. However, fixed rates began easing in mid-late December, presenting an opportune moment for buyers who faced frustrations in the competitive market of the first half of 2023.
With interest rates easing, coupled with limited supply and projected price appreciations in Calgary, the early spring market is expected to be highly competitive. Sellers may grapple with the decision of whether to buy before selling, but selling in 2024 is likely to be the more straightforward aspect. This presents an excellent opportunity for move-up buyers to capitalize on potential price appreciations.
Calgary stands out as an attractive investment and future home for out-of-province buyers, especially during the first quarter, which typically witnesses a surge in relocations due to work commitments. The substantial increase in rental rates in 2023 has shifted the focus back to home buying for renters in 2024.
The real estate market is poised for a dynamic year, marked by new challenges, increased migration to Calgary, and the presence of both investors and first-time homebuyers. If you’re contemplating your real estate plans for 2024, feel free to reach out and let’s discuss your options. Saddle up and give this cowboy a call!
Royal LePage Market Forecast 2024
The ‘great adjustment’: Canadians to adapt to new reality as housing market returns to near-normal in 2024.
In Calgary, the aggregate price of a home in the fourth quarter of 2024 is forecast to increase 8.0 per cent year over year to $711,612, the highest of all forecast regions. During the same period, the median price of a single-family detached property is expected to rise 6.0 per cent to $803,692, while the median price of a condominium is forecast to increase 9.5 per cent to $286,562.
“Although activity has slowed in Calgary, home prices have not dipped like they have in other cities across Canada, due to a sustained shortage of supply,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “If rates start to come down in the second half of 2024 – as they are predicted to do – it will motivate buyers to jump into the market as their borrowing power improves. Many homeowners will see their mortgages come up for renewal next year, and will be forced to take a higher interest rate. This may push some more inventory onto the market, as overleveraged borrowers downsize in an effort to get some relief from higher monthly payments.”
Lyall noted that Calgary has seen a slowdown in the number of interprovincial buyers relocating to the city compared to the past few years. However, investors from other provinces continue to look for real estate opportunities in the Prairies, driving demand in the multi-family segment.
“We expect that home prices will rise over the next year, and will outperform other major cities as Calgary’s relative affordability continues to attract buyers to the city. A shortage of supply remains a challenge, which will keep prices on an upward trajectory for the foreseeable future as buyers compete for the few homes available,” said Lyall. “Heading into the new year, I predict that we will see a slow start to the market in January and February, a similar pattern to what we saw in early 2023. Once March arrives, buyers and sellers will move off of the sidelines as a brisk spring market begins and consumer confidence strengthens.”
December 2023 – Calgary Real Estate Market Recap
Annual sales declined by almost 20%, driven by limited choices in lower price ranges.
Despite some gains in higher-priced listings, inventories remained near record lows.
Benchmark prices for detached homes rose by nearly 8%, with the most significant gains in affordable districts.
Sales declined by 10% in 2023, primarily due to limited choices in the under $500,000 range.
Prices trended upward, with an annual benchmark price increase of 7%, ranging from 6% in the city center to over 16% in the east district.
Annual sales declined by over 11%, mainly due to limited choices in lower price ranges.
Sellers’ market conditions persisted in lower price ranges, contributing to an annual benchmark price gain of over 13%.
This property type reported a sales gain, reaching a record high of 7,884.
Despite initial gains in inventory levels and new listings, conditions tightened, resulting in a benchmark price increase of over 13%, reaching a new record high of $321,400.
Regional Market Facts:
Sales declined by 24% due to pullbacks in detached homes, favoring sellers for the third consecutive year. Benchmark prices rose nearly 5%, with row and apartment-style properties experiencing double the growth of detached and semi-detached sectors.
Both sales and new listings fell, but recent gains in new listings supported some inventory growth. Prices increased by 4% in 2023, with higher-density sectors experiencing stronger growth.
Supply challenges impacted sales and prices, with inventories averaging 63% below long-term trends. Prices rose over 6% annually, reflecting tight conditions throughout most of the year.