Calgary real estate, much like the real estate industry itself, is rooted in traditional routines and stereotypes. In the Calgary real estate market, references, updates and market trending is usually focused on the listings and sales ratios, benchmark prices and the availability and affordability of re-sales.
Now that it’s 2024, coming off an excitingly hot market year, Calgary’s real estate trending is factoring-in sometimes downplayed real estate categories: condos and rentals. Of course, the consumer demand and sheer numbers of re-sales will continue as key drivers of the Calgary real estate market, condos and rentals are very much earning their Calgary creds as real estate market influencers.
Blame or credit the drawing power of the Calgary area and spiking migration trends, the numbers are indisputable. The Calgary real estate market continues to experience an influx of homebuyers, internationally and from other provinces, keen on acquiring investment properties.
A key factor is Calgary’s affordable real estate prices, especially compared with Canada’s other major urban centers like Vancouver, Toronto and the sprawling southern Ontario region. In most sectors of the Calgary market, from re-sales to new builds, multi-family condos and rentals, 2024 continues as a good news/bad news real estate story.
It’s a Calgary bragging-right positive that the area is in such hot demand. It is also a frustrating, real estate negative that there is drastically low supply. It creates a strange contradiction. A lack of supply in the Calgary housing market notoriously pushes benchmark home prices higher. And unaffordability pushes consumers toward lower-price options and lowers average home prices.
Last year, Calgary’s number of home sales rose by more than 17 per cent, and detached home average prices increased by almost 11 per cent, to $726,000. Semi-detached home average price increased by almost 15 per cent, townhouses by 20 per cent, and condo average prices increased by more than eight per cent to $322,000.
Heading into the new year, Calgary Realtors, real estate analysts and market trackers like the Calgary Real Estate Board (CREB) are acknowledging the role and impact of condos and multi-family rentals as vital components of Calgary’s real estate market.
Condos for sale in Calgary are now the hottest property commodity. According CREB summer 2023 numbers, condos have outperformed other residential property types, not only showing a potent 50 per cent sales increase year-over-year, the second-largest benchmark price jump and made up about 25 per cent of all Calgary home sales this year.
Last year, while most Calgary real estate professionals were reacting and strategizing about Calgary’s hot market, one real estate sector was dealing with the positive hot market opportunities of surging consumer demand but also contentious hot market availability and affordability issues: multi-family Calgary rentals.
According to the high-energy and plugged-in Shamon Kureshi, director of the Calgary Residential Rental Association (CRRA) and president and CEO of Hope Street Management Corporation, “Some of the driving factors which have made the Calgary rental market so strong in the past 18 – 24 months have been rising interest rates making home ownership prohibitive for many would-be buyers, and huge inward migration.
“Can it last? Probably yes,” he says. “But we recognize the seasonal nature of the rental industry, which generally slows down after the traditional, frenzied end of the summer rush.”
Kureshi notes a relatively new quirk in Calgary’s rental market. “Detached houses seem to be in high demand, with an increase in roommate situations – three people get together and rent a house, where previously they may have each rented a one-bedroom apartment.”
Another new trend in Calgary hot real estate market is the demand and development of multi-family housing. Primarily population growth, also driven by Alberta’s strong economy is fueling development in Calgary’s new multi-family housing market, whether for rental or ownership.
Experts explain that driving growth on the purpose-built rental side of the multi-family market have been rising rents, which rose from $2.57 per square foot in 2022 to $2.99 per square foot last summer. An increase of about 16 per cent, year over year.
By all indicators and trending, Calgary’s multi-family market is also h-o-t. “Multi-family housing has become very popular for various reasons,” says the respected Ash Mahmoud, president and owner of Cairo Development, specializing in multi-family developments, having completed more than 8,000 multi-family and commercial unit projects in Calgary and western Canada.
“With interest rates and unavailability of affordable homes to buy, there is considerable difficulty owning single family homes. Many Calgary newcomers, either immigrants or inter provincial movers, prefer to rent than buy until they settle and decide on final living decisions. And multifamily rental is a flexibility for most younger generations when it comes to movement and stability, and the tendency to rent is better for them in terms of short-term cash flow.”
Mahmoud is confident that Calgary’s multi-family hot market will continue, at least for three-to-five years, if not longer, due mostly to some Calgary positives.
“The affordability of living here compared to other major cities in Canada, the availability of Calgary work opportunities and for people who like to live near downtown and close to public transportation like the C-train, Calgary is a big draw.”
