Calgary realtors, builders and developers and numbers crunchers agree! Despite nearly an entire year of a hot market, spiked mortgage rates, low inventories and high prices, the Calgary real estate market is a unique dynamic, compared with other major Canadian real estate markets, but the crystal ball about 2024 – for new homes and re-sales – is a bit hazy.
While hindsight is always an interesting reference to where the Calgary real estate market has been, at best, it is a trending guesstimate about where it is headed.
“Calgary’s real estate market in 2023 saw a surge in sales and demand, especially in higher price ranges, primarily thanks to newcomers from Ontario and B.C. seeking affordability despite higher lending rates,” says Christian Twomey, respected Calgary realtor with RE/MAX Landan Real Estate and the former chair of CREB (Calgary Real Estate Board).
“A downside was the shortage of available homes, making it tough for buyers due to limited options and increased mortgage rates. Prices are likely to stay high due to limited housing supply this year. While the pace of increase may slow down, the persistent low supply will keep prices elevated.”
Stats and number summaries are usually relevant crystal ball indicators. And for Calgary 2023, the summary showed that:
- the number of home sales jumped 28 per cent, and actually set a September sales record.
- detached home average price increased by 14.3 per cent, year-over-year, to $730K.
- semi-detached home average price increased by 18.1 per cent, year-over-year, to $601K.
- townhouse average prices increased by 22 per cent, year-over-year, to $419K.
- condo apartment average price increased by 2.4 per cent, year-over-year to $316K.
It is a similar but different situation for Calgary’s new build real estate market. “The allure of the Calgary region as a hot market is multifaceted, driven by its overall desirability and the relative affordability it offers for home ownership,” notes Brian Hahn, CEO of BILD Calgary Region. “In 2023, Calgary witnessed another strong year with housing starts and completions maintaining pace aligning with last year’s record numbers. CHMC housing starts and completions reports track a slight shift in demand toward townhomes, duplexes and purpose-built rental units.
“Overall, there is an increase in the demand for housing, both rental and owned, in the Calgary region. Several factors contribute to this trend, including Calgary’s historical reputation for relative affordability compared to other major metropolitan areas and the overall desirability of Calgary as a place to call home,” Hahn adds.
The experts agree. Re-sale or new builds, Calgary’s 2024 real estate market will continue to be availability and affordability driven.
“One of the most significant hurdles of Calgary’s 2023 market was the need for many buyers to make adjustments to what they could afford, and explore options for smaller or different types of properties,” says Jared Chamberlain, plugged-in realtor, and team lead at Chamberlain Group. “Buyers in and around Calgary found themselves in a highly competitive landscape, where multiple offers became the norm for almost every style and price range of homes.
“The upside is that the past few years have brought about remarkable increases in property values, primarily due to a significant influx of people relocating to Calgary, and persistently low housing inventory in the region. Consequently, property owners experienced a surge in the value of their homes, unlike anything seen in decades.”
The crystal ball gazing professional speculate about 2024.
“Calgary factors like migration and a strong job market are maintaining the momentum. And considering the ongoing demand and local job opportunities, the Calgary market will likely stay hot into 2024,” says the upbeat Christian Twomey. “If rates do rise next year, it will affect buyer affordability, slowing down demand, and sellers could face a more selective market. But if rates are lowered, demand will likely increase, and potentially trigger more home price rises. Exact impacts depend on economic factors, which need continuous monitoring throughout the year.”
Spiked mortgage rates are big factor for re-sale and new builds.
“Rising interest rates would present an increased barrier to prospective homebuyers and renters, eroding affordability,” Hahn points out. “Through our advocacy with policy makers, we have encouraged measures to lower the barriers that higher interest rates would present. Specifically, we have encouraged policy makers to adopt longer insured mortgage amortization periods, fix the stress test and avoid more mortgage rule tightening.”
Mortgage rates for 2024? Available inventory for 2024? Calgary affordability for 2024? Will Calgary’s hot market turn lukewarm in 2024? The crystal ball is simply not sure.
“Despite the potential for the real estate market in Calgary to cool off, it is important to consider the city’s affordability in comparison to other major cities,” Jared Chamberlain says. “Price points, coupled with Calgary’s growing reputation as a sought-after destination for individuals relocating to Canada and Alberta, suggests that any possible lukewarm market conditions will likely be short-lived.”
