While the report acknowledges a slowdown in sales activity compared to the previous year’s record-breaking pace, it highlights that the current sales rate remains significantly stronger than long-term trends. Particularly notable is the unexpected robust demand observed within the higher price segments of the housing market.
Chief Economist Ann-Marie Lurie attributes this unanticipated strength to an influx of migrants from Ontario and British Columbia. Lurie suggests that the relative affordability of Calgary’s properties might be making migrants less sensitive to the recent increases in interest rates. Additionally, she underscores the strength of the local labour market as a driving force behind the sustained demand across all property types.
Supply shortage presents challenges across resale, new home and rental markets
A persistent challenge facing Calgary’s real estate market is the shortage of housing supply. According to CREB, this scarcity spans various segments, including resale, new home construction and the rental market. Despite efforts to increase new home starts, the influx of migrants has outpaced supply, leading to ongoing constraints. Existing homeowners have also encountered hurdles due to higher lending rates and limited choices in the housing supply, which CREB says have discouraged them from making property changes.
Tight market conditions drive unexpected price growth
The scarcity in housing supply has contributed to sustained tight market conditions, resulting in stronger-than-anticipated price growth across all property categories in Calgary. This consistent price appreciation throughout the year has effectively counterbalanced the declines observed in the latter part of 2022, ultimately culminating in new record-high prices.
“Home prices have exceeded our expectations as supply challenges have persisted throughout the spring market,” adds Lurie. The economist notes that while the pace of monthly price gains is projected to ease in the second half of 2023, the limited supply of housing choices is expected to maintain elevated prices throughout this period.
