This past winter in Calgary has been one of the hottest on record – unfortunately, for residents, we don’t mean because of the weather. The Calgary Real Estate Board (CREB) has once again released statistics showing the city has broken records in February. With an unprecedented two years in the city, investors are now wondering what they can expect next.
We spoke with Jesse Davies, a top local realtor in the Calgary area, about newly released stats from the Calgary Real Estate Board, his own experiences in the market now, and what changes may be coming in the future.
According to CREB, the month of February 2022 marked the highest sales ever reported for a February in Calgary with 3,305 sales total. The higher sales are due, in part, to an increase in listings from the previous month, but also due to continued demand for homes in the market. In particular, detached homes are driving much of the market currently. Davies notes that persistent sellers’ market conditions and limited supply are helping to drive this segment. Currently, there is less than one month of supply for detached homes available.
“Most of the gains in the housing market have been driven by the detached sector which has accounted for more than 60% of all resale activities in 2022,” said Davies. “The market is still adjusting to the loss of inventory before the pandemic, but the demand still remains. This winter we saw higher demand while not all of the inventory is fully replenished yet.”
The benchmark price of a detached home in Calgary climbed to $569,400 in February – a 19% increase year over year. Other segments saw similar increases, with the condo market displaying the slowest growth at 5%, though demand is still increasing in this segment as buyers move away from the tight detached market.
Beyond looking at other property types, investors are also branching out into nearby areas of the region to find better deals on homes.
“The Calgary housing market has definitely increased interest in other surrounding areas where buyers can find less competition and more affordable homes,” said Davies. “The prices have increased overall in Alberta, however, the surrounding areas are still more affordable than in the city itself, so it makes sense for investors. Investors are looking at areas like Airdrie, Okotoks, Cochrane and Chestermere as alternatives.”
With steady performance through what is usually a slower winter season and interest from would-be homeowners and investors alike driving demand, it seems things are good for Calgary at the moment.
Now, investors want to know just what they can expect in the future. With new changes like an outgoing pandemic and increased mortgage rates, things are likely to change, though how much and how quickly is still up in the air.
“The current mortgage rate increase has cooled down the competitive detached market a little, but we still have a high demand from buyers that are looking for the right home, as Calgary still holds an affordable home pricing when compared to other areas of the country,” said Davies. “The market should eventually pick up again shortly after the announcement of mortgage rate increases, similar to what happened in GTA.”
“We are still experiencing a seller’s market in the detached and semi-detached sectors. However, townhouses and apartments are showing signs of improvements towards a balanced market with an increase in sales of 100% in townhouses (active listings down by 32%) and 108% in apartments (active listings down by 25%). Also, both show a positive increase in the average price.”
Overall, Davies echoes what many analysts have predicted for the coming year: though changing conditions may slow the market somewhat, persistent demand and supply issues will likely keep upwards momentum going, at least in the near future.
“In 2022, rising interest rates and higher average prices are going to be two factors the Calgary real estate market will have to contend with. Short term, the increase in interest rates should create urgency for buyers to take advantage of their 90-day rate holds and avoid higher monthly payments. Supply is still expected to struggle to keep pace with the options in the new-home market and higher prices should keep new listings above average, but it will take some time before the detached sector returns to more balanced conditions.”
Jesse Davies and his team have over 15 years of experience in the Calgary market and have helped countless clients buy, sell, and invest in the city. Visit Jesse Davies online to connect with him and his team, and to learn more about real estate opportunities in the Calgary area.