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Calgary, Alberta, is consistently rated one of the most livable cities in the world, so it’s no wonder this tight real estate market has stayed red-hot for years. Things will likely stay this way through spring and summer of 2024, even though interest rates remain at about 5%. Increased migration from other provinces and outside of Canada means more people are competing for an ever-dwindling inventory of homes that tend to move quickly as soon as they’re listed for sale. If you’re looking to buy in this vibrant city, here’s what you need to know.
High demand meets low inventory
According to a recent Calgary Real Estate Board (CREB) market report, new listings rose in February 2024 to 2,711 units, while sales increased by nearly 23% since 2023. This shift resulted in a sky-high sales-to-new-listings ratio, leading to near-historic low inventories as buyers jump on properties before they’re gone, reports Ann-Marie Lurie, CREB’s Chief Economist.
“We’re outperforming our longer-term trends,” explains Lurie. “We had very different conditions prior to the pandemic in our market because of what was happening in our economy and we’re now seeing strong job growth for higher-paid sectors and an inflow of international and also interprovincial migrants that’s keeping our demand much higher than longer-term trends.”
This strong demand and low supply—especially for homes priced under $500,000—saw inventories fall by 31% year-over-year.
“We’re struggling to see supply keep up because there hasn’t been much inventory build,” says Lurie. “Our inventories are at near-record lows for our city, so we’re experiencing some strong seller market conditions.”
Because of the spike in migration patterns over the past two years, Calgary builders can’t keep up, either, she adds.
“New home builders have increased their supply—we’ve seen more new development activity in 2023 and they hit record highs for the city—but it takes time to add these developments,” she explains. “The new home sector faced some challenges with land availability and labour supply, which puts a limit on how quickly they can build product. Plus, it’s hard for them to construct in the under $500,000 or $600,000 range, so there’s just hardly anything there. That’s a shift in our market that we haven’t seen before.”
Prices continue to rise
Across Canada, home prices have been trending upwards since 2020, notes Lurie. But unlike other cities, Calgary’s still going strong.
“In 2023, where other markets were seeing some pullbacks in prices, we were still continuing to report growth,” Lurie explains. “On an annual basis, our benchmark values increased by 6% in 2023—following a 12% gain in 2022—so that’s exceptionally strong price growth.”
The benchmark price of a home in Calgary went up by more than 10% since 2023 to $585,000, she adds.
“On the detached side, the biggest challenge is coming in the affordable side of the market,” says Lurie. “In 2021 in Calgary, our typical detached home was priced in the $500,000 to $600,000 range; now we’re seeing that push into the $700,000 range. That’s a big change.”
Trends in housing types and neighbourhoods
About 75% of the detached homes that came into the market in February were listed at more than $600,000, with sales up by 20% since last year, according to the CREB. Prices rose the most in Calgary’s North East and East districts, with these areas also seeing the largest decline in inventory, reports Lurie.
“That reflects the very strong demand there and not enough supply,” she says. “Inventories in the detached homes market have been down for some time, but are roughly 50% lower than what we’d typically have in the market, and we’re seeing this in semis and rowhouses as well.”
Semi-detached homes were 13% higher than last year, with year-over-year price gains ranging from 10% in City Centre to more than 26% in the East district. Row house listings rose 22% since 2023 and tight market conditions meant strong price growth for these properties—19% higher compared to last February.
Buyers who couldn’t find homes turned to condos, which were up 39% year-to-date, according to the report.
“Because of these price gains, we’ve seen more of a shift towards apartment-condos where there was supply choice—and that’s starting to disappear, too, now,” says Lurie.
Here, inventory levels declined by 12%, making it challenging for buyers, but lucrative for sellers.
Home hunters need to be ready to jump
It’s important for buyers to get pre-approved and pre-qualified for financing so that when they do see something, they can quickly put in an offer to purchase, suggests Lurie.
“If you’re a first-time home buyer looking for a lower-priced property, that’s where supply has been really a challenge, so you have to be ready to move because there isn’t a lot of supply choice,” she explains.
Looking ahead
With Calgary’s low inventory environment, Lurie predicts continued price pressure into the summer of 2024, especially if there’s not much listing growth.
“Even if we start to see some supply growth, it’s going to take time before it returns to more balanced conditions,” she says. “Buyers have to understand what they can afford, do their research on the market, and be ready because properties are selling quickly.”
Working with an experienced REALTOR® who has access to the latest data information means you have a trusted guide to help you throughout the buying and selling process.
The article above is for information purposes and is not financial or legal advice or a substitute for financial or legal counsel.
