Calgary’s housing market continues to surpass expectations, with record-breaking sales in May driven by strong demand for apartment condominiums. 

Although the market had experienced declines earlier in the year, CREB’s latest figures indicate a notable shift in momentum. Additionally, the persistently tight market conditions, characterized by fewer new listings compared to last year, have led to a decrease in inventory levels. 

With a high sales-to-new-listings ratio of 85 per cent and only one month’s supply available, the current conditions continue to favour sellers, exerting upward pressure on home prices.

“Calgary’s housing market continues to exceed expectations with the recent gain in sales activity this month,” says CREB Chief Economist Ann-Marie Lurie. 

According to Lurie, the increase in interest rates and recent growth in rental rates have led to a greater number of individuals looking to purchase apartment condominium units. Additionally, the rise in new apartment listings has offered buyers more choices, contributing to the surge in sales. 

Lurie also noted that Calgary’s housing market is benefiting from a favourable job market and recent population growth, both of which are keeping housing demand strong across various property types.

In May, the unadjusted benchmark price reached $557,000, over one per cent higher than last month and nearly three per cent higher than last year’s monthly peak price of $543,000.

Strong demand for higher-priced detached homes partially offsets declines in lower price ranges

The surge in May sales did not translate into overall growth for the detached housing segment, as lower-priced homes experienced a decline in sales, although there was an increase in sales for homes priced above $600,000. 

The limited choice for consumers seeking lower-priced detached homes can be attributed to the ongoing decrease in new listings in that price range, CREB reports. On the other hand, higher-priced properties witnessed improved new listing numbers, but the sustained demand across all price ranges kept market conditions tight and contributed to further price gains.

The benchmark price for detached homes reached $674,000 in May, marking a nearly two per cent increase from the previous month and a four per cent increase from last year’s peak price of $647,000. 

All districts in Calgary reported new record high prices for detached homes, with year-over-year gains ranging from two per cent in the City Centre to 12 per cent in the East District.

Semi-detached sector achieves near-record sales, resulting in further price gains

The semi-detached housing market also experienced a surge in sales, nearing record highs for the month of May. However, with only 279 sales and 269 new listings, inventories dwindled, and the months of supply dropped below one month. 

CREB notes these exceptionally tight market conditions drove further price gains, pushing the benchmark price above $600,000 for the first time, marking the seventh consecutive month of price increases, with levels over three per cent higher than last year’s monthly peak. 

According to Richard Fleming, broker/owner of Re/Max Real Estate (Mountain View), rising interest rates are presenting a challenge for numerous potential buyers who have their sights set on purchasing detached homes.

“Residents in the area, who two years ago, could afford a detached home at a 2.25 per cent rate for a five-year fixed term, are no longer able to today, due to interest rates coupled with inflation and the rising cost of living,” Fleming explains.

“With that being said, prospective buyers are still eager to enter the market, even if it means doing so through semi-detached homes and condominiums.”

Each district in Calgary reported new record high prices for semi-detached homes, with the most substantial year-over-year gains occurring in the affordable East district, reaching nearly 12 per cent.

Low inventory continues to hamper row home market

According to CREB, the row home market witnessed improved new listings in May compared to earlier in the year. However, due to a surge in sales, the sales-to-new-listings ratio remained exceptionally high at 89 per cent, preventing any significant change in the low inventory situation. 

Sales activity remains lower than last year, primarily due to the lack of supply. Inventory levels have plummeted by 50 per cent year-over-year resulting in less than one month’s supply. As a result, prices continue to rise, with the benchmark price reaching $390,500 in May, marking a two per cent increase from the previous month and nearly nine per cent higher than last year’s peak price of $359,600. 

All districts in Calgary experienced price gains for row homes, with the highest year-over-year increases exceeding 15 per cent in the North East, South, and East districts.

Apartment condominium sales surge to new record high

The standout performer in Calgary’s real estate market in May was the apartment condominium sector, with sales reaching 858 units — a year-over-year gain of 36 per cent. The surge in sales was supported by recent gains in new listings, with 1,025 new listings recorded in May, representing an eight per cent increase compared to the previous year. 

However, despite the rise in new listings, the sales-to-new-listings ratio remained high at 84 per cent, indicating that inventory levels remained significantly lower than those of May 2022, with a 23 per cent decrease.

Fleming says there has been a notable increase in demand for condominiums and apartments priced below $400,000.

He adds, “The shortage of condo inventory is making this a very competitive market that favours sellers. Listings are seeing multiple offers come through, and I anticipate that prices will increase across the board for condominiums specifically.”

The combination of rising sales and limited inventory levels resulted in a low months of supply figure of just over one month for apartment condominiums. 

In May, the unadjusted benchmark price for apartment condominiums reached $298,600, reflecting a monthly gain of over one per cent and a year-over-year increase of nearly 11 per cent. CREB reports this growth has brought apartment condominium prices back to 2014 levels.

While not all districts reported new record high prices for apartment condominiums, several areas, including the North, North West, West, and South East districts, did report a full recovery. Overall, year-over-year price growth in the apartment condominium segment ranged from a high of 16 per cent in the North District to a low of 10 percent in the City Centre.

REM Editorial Team