Most residential real estate professionals in Calgary will remember this time as the wild market of 2021! There are various, expected and unexpected factors but, re-sales and prices are way up, condos continue a slump and rentals have cooled off.
“In Calgary, re-sales totalled 15,050 units after the first half of the year,” says Ann-Marie Lurie, the plugged-in chief economist with CREB. “The highest levels seen in more than a decade. While pent-up demand and low interest rates were expected to support sales growth in 2021, the strength in housing demand has surprised many, especially given the amount of job loss that occurred due to the pandemic.”
Numbers show that in the first half of this year supply gains did not keep pace with demand causing a “hot seller’s market” with some big price gains. Calgary’s benchmark home prices went from $492,000 in January to $537,200 in June. “With some of that pent-up demand now filled, sales are expected to remain strong through the end of the year,” Lurie adds, “but they should slow to levels more consistent with longer-term trends.”
Lorna Hamm, the current CREB chair, underscores the positivity. “We’re moving through this recovery phase in Calgary, and that’s good for the economy and business in general. When these areas are strong, we see a stronger job market and more people wanting to come to Calgary and pursue home ownership.
“Real estate is very local, which means the way a particular area is functioning may be quite different than another area within the same general marketplace,” she says. “This is typically tied to competition for a given property, the location, the community and even the specific neighbourhood and street where the property is situated.”
Despite the ups and downs of real estate, Ann-Marie Lurie projects that re-sales are expected to exceed 24,000 units, making 2021 the best year of sales since 2014.
Even the quirky condo category is showing some slow and gradual improvements. Earlier this year, CREB tracking showed that the condo inventory went down and prices went up, slightly, by about three per cent year over year.
According to experts like Gerry Baxter, executive director of the Calgary Residential Rental Association, “The economic recession in Alberta began in the fall of 2014. The effects of the downturn did not impact the residential rental industry in Calgary until the third quarter of 2015. Since that time, the recession has taken quite a toll on the industry.
“Then COVID struck in the first quarter of 2020 and compounded the negative impact of the economic recession, and made it even more challenging to operate and maintain rental properties. Today, the rental market is showing some slight signs of recovery as inquiries and showings of rental units have been increasing.”
Michael Mak, economist with Canada Mortgage and Housing Corporation (CMHC)
also underscores some encouraging factors about Calgary’s rental market. “Supply has steadily increased over the past five years, with both primary and secondary rental units coming to the market. Prior to COVID, the vacancy rate decreased since 2016, while average rents have slowly risen.
“There has been a rising vacancy rate in the city, with downtown Calgary having the largest vacancy increase at 8.8 per cent last year compared to 3.4 per cent in 2019. Rental demand has decreased due to a combination of the economic impact of the pandemic, oil sector job losses and the border closure leading to restricted immigration.
Some things rarely change. “Employment, interprovincial migration and international immigration are key factors to the Calgary rental market,” Mak says.
“Today, the rental market is showing some slight signs of recovery as inquiries and showings of rental units have been increasing,” Baxter says with positivity. “With the removal of most of the COVID restrictions and some signs that our economy is improving, there is a cautious optimism as we look ahead. Like everyone else we are hopeful that at some time in the near future our lives and businesses will return to normal.”