Into the second half of 2024, migration continues to impact Calgary real estate and rentals, while affordability and availability continue to be market speedbumps.
“Calgary is still a seller’s market,” says the upbeat Christian Twomey CREB® chair and RE/MAX Landan Real Estate. “Q1 was driven by record-high international and interprovincial migration that boosted housing demand. Sales growth was strong despite high interest rates, and Calgary had historically low inventory levels and benchmark price increases of more than two per cent from the previous quarter and 10 per cent from the previous year.
By May, the Calgary market had strong demand and robust home sales. This is despite supply shortages, particularly in lower price ranges, and it pushed the unadjusted total benchmark price up one per cent from April and 10 per cent from the previous year.”
Twomey crunches the numbers and says that even with more new listings in Q2, the Calgary market continues to favour sellers.
CREB stats and trending illustrate that Calgary’s real estate market is still significantly impacted by the affordability factor. Despite the recent .25 Bank of Canada rate cut, high mortgage rates also continue to affect sales.
April numbers show that sales rose by seven per cent compared to last year, and much of the growth in sales happened with relatively more affordable, higher-density listings. The stats underscore that affordability is still a big Calgary factor.
According to CREB, while supply levels are still declining, much of the decline has been driven by lower-priced homes. Homes priced below $500,000 have reported a 29 per cent decline. Meanwhile, there is a noticeable growth in listings priced above $700,000.
Persistently high-interest rates are driving demand toward more affordable products in the market and, at the same time, driving listing growth for higher-priced properties.
Price ranges and mortgage rates are a volatile Calgary real estate factor.
“With buyers still looking who haven’t secured a property yet, there will still be pent-up demand moving forward for at least the remainder of 2024, and possibly into the 2025 Spring market,” notes respected Calgary Realtor Corinne Lyall, owner and broker at Royal LePage Benchmark.
“I don’t believe a quarter interest rate drop will have an impact on the market at this time, other than those who are locked into variable rates. However, if interest rates continue to drop, we may see more buyers enter the real estate market, which could put further demand on our already limited housing supply.
“With the possibility of further interest rate decreases, we will see buyers being able to commit to higher mortgages hopefully to offset the price increases. We are seeing somewhat less demand in the higher price ranges.”
She adds that migration will continue to be an important factor in Calgary real estate for the balance of the year, and likely into 2025.
“There has been some decline in inter-provincial migration as Calgary’s prices increase and people are looking for more affordable markets, like Edmonton. But international migration will continue to put pressure on our inventory in both the purchase market and as well as Calgary rentals.”
The residential rental side of Calgary real estate continues scarce and pricey.
“Calgary’s rental market is expected to tighten further, with vacancy rates for purpose-built rental apartments forecasted to decline in 2024 and 2025,” explains Wayne Morishita, executive director of the Calgary Residential Rental Association (CRRA).
“Despite increased rental construction, demand driven by population growth and reduced mobility into homeownership, rental units will be in short supply. Over half of the apartments started in 2023 were for the rental market. The trend will likely continue, potentially moderating vacancy rate declines by 2026.”
He notes that Calgary builders are expanding rental divisions and capitalizing on zoning changes to offer more rental options, such as row and laneway homes.
Purpose-built rental construction has increased significantly in recent years, with over half of all apartments started in 2023 designated for the rental market. “This trend is expected to continue in the foreseeable future,” Morishita says. “CMHC’s April 2024 under construction forecast for Calgary is 14,368 apartments. If we assume 50 per cent are designated for the rental market, it represents over 7,000 units.”
Despite the frequent Calgary feedback about pricey rental rates, he explains that, compared to other rental markets like Vancouver, Ottawa and Toronto, “Calgary rents continue to be low, especially when you consider we also have the highest income per capita in Canada.”
Most real state professionals are cautiously optimistic – but also realistic – about the Calgary market for the rest of 2024 and the insider guesswork about 2025.
Supply shortages and strong demand are likely to continue in this second half of the year, but an expected increase in the number of new listings, especially in higher price ranges, may take some pressure off the market pressure and ease the pace of price growth.
Christian Twomey points out that although new listings are increasing, supply still isn’t keeping up with demand. “Inventory levels are extremely low by historic standards, with months of supply well below what’s needed to balance the market.”
